One evening, sitting by the fireplace, sipping on a cup of hot coco, I found myself musing on the subject of contract interpretation. I was pondering various active cases and my fading memory of my first year of law school when I had two revelations: 1) I am getting old, and 2) I had no idea if “construe against the grantor” was a rule or a canon. I suspected that I was not the first attorney to have this particular question, so I became determined to find the answer and share it with you.
I suspected that the two phrases were interchangeable. It did not take much research to determine that most practicing attorneys think they are interchangeable, many appellate courts use the terms interchangeably, and the phrases are, in fact, NOT interchangeable. The rules of contract interpretation are used to determine a contract’s meaning, to determine the parties’ respective rights and obligations, and to make the determination as to whether the contract is ambiguous.[1] The canons of construction are utilized to resolve irreconcilable ambiguities in the words of a contract once the actual intent of the parties thereto proves indecipherable.[2] In other words, if a contract is unambiguous, thus a question of law for the court’s determination, the court may utilize the rules of interpretation. Should the contract prove to be ambiguous, the next step is to apply the canons of construction.
If you are still a bit confused, I have compiled some examples for your reading pleasure:
Rules of Interpretation:
- Construe the agreement as a whole;
- Give each word and phrase its plain, grammatical meaning unless it definitely appears that such meaning would defeat the parties’ intent;
- Construe the agreement, if possible, so as to give each provision meaning and purpose so that no provision is rendered meaningless or moot;
- Express terms are favored over implied terms or subsequent conduct; and
- Surrounding circumstances may be considered – not to determine a party’s subjective intent – but to determine the appropriate meaning to ascribe to the language chosen by the parties.[3]
Canons of Construction:
- Ejusdem generis – when a general word or phrase follows a list of specifics, the general word or phrase will be interpreted to include only items of the same type as those listed;
- Expresio unius est exclusion alterus – to express or include one thing implies the exclusion of another;
- The specific governs over the general;
- The same words used in different parts of a writing have the same meaning;[4]
- Contra proferentum – Ambiguous contract terms are construed most strongly against the party responsible for drafting them; and
- Noscitur a sociis – The meaning of a word may be affected by its immediate context. Therefore, a court should construe or interpret a word in the context of the terms immediately preceding and following it.[5]
As you can see from my lists, if the phrase is in Latin, then it is likely a canon, not a rule. I hope that you have found this helpful and that maybe it will allow you to enjoy your fireside coco in peace. If you know of any additional rules or canons, or just some funny Latin phrases, please share them in the comment section below.
[1] Moon Royalty, LLC v. Boldrick Partners, 244 S.W.3d 391, 394-95 (Tex.App. – Eastland 2007, no pet.); McCarty v. Montgomery, 290 S.W.3d 525, 532 (Tex.App. – Eastland 2009, no pet.).
[2] Daniel B. Kostrub & Roger S. Christenson II, Canons of Construction for the Interpretation of Mineral Conveyances, Severances, Exceptions, and Reservations in Producing States (2013).
[3] On Parol: The Construction and Interpretation of Written Agreements and the Role of Extrinsic Evidence in Contract Litigation, 49 Baylor L.Rev. 657, 664–82 (1997).
[4] Vincent R. Martorana, A Guide to Contract Interpretation (2014).
[5] Keith A. Rowley, Contract Construction and Interpretation: From the “Four Corners” to Parol Evidence (and Everything in Between), in Scholarly Works, Paper 554 (1999).
