Legal Memorandum: Rules for Interpreting Contract and Statutes

Issue: Under New Jersey law, what rules inform a court when interpreting contract language and statutes?

Area of Law: Business Organizations & Contracts, Litigation & Procedure
Keywords: Interpreting a contract; Interpreting a statute; Examine the plain language
Jurisdiction: New Jersey
Cited Cases: None
Cited Statutes: None
Date: 02/01/2013

With regard to document construction in general, courts have repeatedly recognized that the first step in interpreting a contract is to “examine the plain language of [the document] and, if the terms are clear, they are to be given their plain, ordinary meaning.”  Pizzullo v New Jersey Mfrs. Ins. Co., 196 N.J. 251, 270 (2008).  Similarly, in interpreting a statute, this Court has “cautioned against ‘rewrit[ing] a plainly-written enactment of the Legislature or presum[ing] that the Legislature intended something other than that expressed by way of the plain language.'” Hardy ex rel. Dowdell v. Abdul-Matin, 198 N.J. 95, 101 (2009) (quoting DiProspero v. Penn, 183 N.J. 477, 492 (2005)). 

The general rule has been that “[t]he law will not make a better contract for parties than they themselves have seen fit to enter into, or alter it for the benefit of one party and to the detriment of the other.”  James v. Federal Ins. Co., 5 N.J. 21, 24-25 (1950).  This requires a court to apply all the clear terms of a contract, as written, including express exceptions and exclusions.  Id.; Stafford v. T.H.E. Ins. Co., 309 N.J. Super. 97, 103 (App. Div. 1998) (“the court should not ignore the clear meaning and intent of exclusion provisions.”). 


Subscribe to Litigation Pathfinder

To get the full-text of this Legal Memorandum ... and more!

(Month-to-month and annual subscriptions available)