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Legal Memorandum: Interpretation of Contract Terms

Issue: What are the rules of construction applied to contract terms?

Area of Law: Business Organizations & Contracts
Keywords: Contract terms; Rules of construction
Jurisdiction: New Jersey
Cited Cases: 220 N.Y.S.2d 434; 57 N.Y.S.2d 594
Cited Statutes: None
Date: 10/01/2007

The plain meaning of the contract must prevail.  The phrase, “provided, however,” has a particular meaning: it expresses a limitation of, or exception to, what came before.  See In re Livingston’s Estate, 220 N.Y.S.2d 434, 436 (App. Div. 1961) (interpreting part of workers’ compensation law giving wage claims “prior preference” in various legal proceedings and stating “the words, ‘provided, however’, are deemed to denote the expression of a limitation or exception”); Millard v. Millard, 57 N.Y.S.2d 594, 596 (Sup. Ct. N.Y. County 1945) (construing “provided, however” in trust document, court stated that “provided” means a limitation or exception, and “however” denotes “added confirmation of the same intention”).  See also Beaugard v. Johnson, 281 N.J. 162, 169 (App. Div. 1995) (citations omitted) (“and” connotes “natural conjunctive import”); Hoffman v. Jinks, 134 N.J. Eq. 91, 92 (E. & A. 1943) (“and” generally connects clauses). 

If an interpretation of a contract is not clear from the language used, and the language was ambiguous, a factfinder must decide what it means.  See Great Atl. & Pac. Tea Co. v. Checcio, 335 N.J. Super. 495, 502 (App. Div. 2000) (construing contracts generally is for court, but “where there is uncertainty, ambiguity or the need for parol evidence in aid of interpretation . . . the doubtful provision should be left to the jury”).

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