Legal Memorandum: Court factors in determining contract terms

Issue: Under Illinois law, what rules do courts use when interpreting contract terms?

Court factors in determining contract terms

"The primary goal of contract interpretation is to give effect to the parties’ intent by interpreting the contract as a whole and applying the plain and ordinary meaning to unambiguous terms." Joyce v. DLA Piper Rudnick Gray Cary LLP, 382 Ill. App. 3d 632, 636-37 (2008); see also Gallagher v. Lenart, 226 Ill. 2d 208, 233 (2007) ("A court must initially look to the language of a contract alone, as the language, given its plain and ordinary meaning, is the best indication of the parties’ intent."). "As a general rule, the parties’ intentions are determined from their final agreement." Kehoe v. Commonwealth Edison Co., 296 Ill. App. 3d 584, 590 (1998). Illinois follows the "four corners rule for contract interpretation in that," ‘[a]n agreement, when reduced to writing, must be presumed to speak the intention of the parties who signed it. It speaks for itself, and the intention with which it was executed must be determined from the language used.’" Air Safety, Inc. v. Teachers Realty Corp., 185 Ill.2d 457, 462 (1999) (quoting Western Illinois Oil Co. v. Thompson, 26 Ill.2d 287, 291 (1962)). "If the language of the contract is facially unambiguous, then the contract is interpreted by the trial court as a matter of law without the use of parole evidence." Air Safety, Inc., 185 Ill.2d at 462.