How Clear is the Deal?

Business can be unpredictable, even in the regular course of
business.  Most businesses have a clear understanding of their marginal
rates of return, and know exactly what they need to most effectively conduct
their operations.  But every business owner knows that some problems are
not foreseeable.  In a contract, business owners write down what they need
and what they expect.  Often an understanding appears simple – or is
simple – but problems come up when conditions change or unexpected events take
place.  The words chosen for a contract can lead to expensive and
time-consuming litigation.   To minimize costs, every businessperson
needs some basic information about contract drafting and contract
interpretation.
The interpretation of a contract is a search of the terms in
the contract and their use in the contract for the intent of the parties. 
The intent of the parties is determined by what they write in the contract, as
a whole, as written, and not a later interpretation according to what a party
meant to express or later says that he or she meant.  Courts in Texas and
most jurisdictions look to the “ plain meaning” of the
language written in a contract.  The “plain meaning” is just what the
phrase sounds like:  the plain grammatical meaning, unless it definitely
appears that intention of parties would be misconstrued.
Unfortunately, problems come up and people claim different
understandings of what they say and mean, and “plain meanings” are taken to
mean different things.  Courts will only look beyond the plain meaning of
the words you choose in a contract when the terms are ambiguous.  A court
will not change a contract just because it or one of the parties comes to
dislike its provisions or thinks that something else is needed. 
The terms of a contract are ambiguous only when competing interpretations offered are reasonable after the application of
the relevant rules of construction.  The rules of construction consist of
customary uses of terms and grammar, and are described in legal opinions,
dictionaries and academic treatises.  An example of a rule or construction
is the “ Doctrine of Ejusdem
Generis
,” which, aside from being fancy Latin,
provides that, if words of a specific meaning are followed by general words,
the general words are interpreted to mean only the class or category framed by
the specific words.
Only if any ambiguity remains after
applying the rules of construction may evidence from outside
of the contract itself be used to interpret the contract-what the parties
meant.  If there is any ambiguity, the relevant portions or omissions of
the contract are construed
against the drafter.
 Courts are staffed by generalists who may not have specialized knowledge
and who are removed from the expectations in the operations of a specific
business.  In the long-term, it is prudent to have a professional draft a
contract that minimizes this risk. 
Whether for businesses with numerous relationships with
clientele and suppliers, or for specialized relationships and large accounts,
at the Vethan Law Firm, PC we listen to
the needs of business owners for their business’s transactions and we draft
instruments that limit potential ambiguities and inconsistencies, and that
identify points in a contract that may be ripe for a potential dispute.
If a business already has a dispute, our experienced
litigators protect the rights of business owners – and their pocketbooks – with
dignity and with vigor.