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Legal Memorandum: Interpretation of Contracts in VI

Issue: What are the rules for contract interpretation under the laws of the Virgin Islands?

Area of Law: Business Organizations & Contracts
Keywords: Contracts; Rules for interpretation
Jurisdiction: Virgin Islands
Cited Cases: 273 F.3d 332; 71 F.3d 1125
Cited Statutes: None
Date: 11/01/2004

The paramount goal of contract interpretation is to determine the intent of the parties.  Garden State Tanning, Inc. v. Mitchell Mfg. Group, 273 F.3d 332, 335 (3d Cir. 2001).  If the parties’ intent can be cleanly extracted from the clear and unambiguous words of the contract, then the parties will be held to those words.  Compass Tech., Inc. v. Tseng Labs., Inc., 71 F.3d 1125, 1131 (3d Cir. 1995).  If, however, the contract terms are facially ambiguous, then “the court should hear evidence presented by both parties and then decide whether there are objective indicia that, from the linguistic reference point of the parties, the terms of the contract are susceptible of different meanings."  Id. at 1131.  It is axiomatic that ambiguities in a contract are resolved against the party who drafted it.  Frederick v. Hess Oil V.I. Corp., 17 V.I. 523, 530 (D.V.I. 1980).  Furthermore, the entire contract must be considered, and an interpretation must be chosen that best accords with the reasonable expectations of the parties and the remainder of the contract.  Pan Am. Realty Trust v. Twenty One Kings, Inc., 6 V.I. 332, 343 (D.V.I. 1968).

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