Interpretation and Construction in Contract Law
53 Pages Posted: 8 Feb 2017 Last revised: 6 May 2017
Date Written: mAY 1, 2017
In their technical senses, “interpretation” refers to the search for a legal text’s meaning, “construction” to the determination of its legal effect. Although scholars have long recognized the difference between the two activities, today many do not attend to it, and the relationship between them remains understudied. An adequate account of the interpretation-construction distinction begins with the concepts’ history, and the eventual recognition that interpretation and construction are complementary activities. This lays the groundwork for investigating the interaction between them. Interpretation always precedes construction in the process of legal exposition. But because contract law recognizes multiple types of meaning, what counts as the right rule of interpretation depends on the applicable rule of construction. In this way construction also precedes interpretation. Rules of construction also sometimes figure into parties’ communicative intentions, and therefore the pragmatic meaning of what they say and do. And individual acts of judicial construction can give ordinary words new semantic meanings, as in the creation of boilerplate. This more fulsome understanding of the interaction between the interpretation and construction of contracts shows that metaphor of a “construction zone” that has been advanced by constitutional originalists does not translate to contract law. Critical readings of several major judicial opinions, including Justice Traynor’s in Pacific Gas & Electric and Justice Alito’s in Stolt-Nielsen v. AnimalFeeds International, demonstrate the practical value of attending to the complex interrelationship between interpretation and construction.
Keywords: contracts, legal theory, interpretation, construction, plain meaning, parol evidence
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