Contract Interpretation

News & Analysis as of

Natural Language Interpretation Triumphs Despite Junior Noteholders’ Frustration With Rating Agency

The claimant Note Trustee and Issuer Security Trustee (the Trustee) sought the Court's assistance interpreting a servicing agreement (in the context of a mid-2007 commercial mortgage-backed securitisation (CMBS) transaction)...more

Does General Release Also Cover Noncompete Agreement?

In determining the proper scope of the general release, the court analyzed both the express contract language and the parties' negotiations. Regarding the express contract language, the court found that the general release...more

Eastern District of New York ultimately arrives at right outcome when interpreting “Employer’s Liability” exclusion in CGL policy

In Hastings Development, LLC v. Evanston Insurance Company, No. 14-cv-6203 (ADS)(AKT) (Oct. 30, 2015), the U.S. District Court for the Eastern District of New York correctly determined that an “Employer’s Liability” exclusion...more

“Conforming With” May Not Be “Pursuant To”

Lawyers often will write “pursuant to [name of law or regulation]” without expecting the phrase to be the source of controversy.  But language is an inherently ambiguous tool and lawyers will, if adequately feed, argue about...more

California Appellate Court Enforces Homeowners Insurance Policy Exclusions

On October 21, 2015, the California Second Appellate District Court of Appeal issued its opinion in Grebow v. Mercury Insurance, which was modified without a change in judgment on October 26. The opinion offers an in-depth...more

Court Of Chancery Explains How To Interpret A Contract

This is a great case for an explanation of how a court should go about interpreting an ambiguous contract. It explains how extrinsic evidence is used and the role of the good faith negotiator principle....more

Even Brain Surgeons Make Dumb Decisions

RHP hired Schindler to practice neurosurgery. Two years later, he developed various back-related physical issues that interfered with his ability to perform surgery. RHP took steps to accommodate him so that he could...more

Construction & Engineering Alert - September 2015

Interpreting the payment provisions in construction contracts: clarification and guidance provided by the TCC To be effective, an application for payment needs to be free from ambiguity. It should state the sum...more

Legal v. Illegal Drugs in Event Cancellation Policies

The abuse of illegal drugs continues to claim its victims in the entertainment industry, as the death of Academy Award winner Philip Seymour Hoffman shows. The 46-year old actor suddenly passed away on Feb. 2, 2014, due to...more

California Court of Appeal Finds Life Insurance Policy Ambiguous and Rules in Favor of the Insured

Sequeira v. Lincoln Nat’l Life Ins. Co., No. A139639 (Cal. Ct. App. Aug. 31, 2015) - The California Court of Appeal recently reiterated the importance of careful drafting to insurers when it reversed a trial court’s...more

Did You Ever Wonder Whether “Within” Might Be A Superfluous Pleonasm?

Suppose that you hold an option that must be exercised “within 30 days prior to the expiration of the option”.  Does this mean that you must exercise the option no later than thirty days before the expiration date or that you...more

4 Ways to Avoid Ambiguity in Your Writing

Ambiguity in any writing is annoying, but in a contract it can be devastating if you wrote it, because any ambiguity in a contract is likely to be construed against you. Here are some ways to avoid ambiguity in your next...more

Thou Shalt Not Deceive: The New Commandment for Canadian Business

In 2014, the Supreme Court of Canada rendered two decisions relating to the law of contract. Parties doing business in Canada should be aware of these decisions because they have significantly changed how contracts are to be...more

(US) Commercial Real Estate Brokerage Agreements: Imprecise Commisson Language Can Cost You

It would be unfair (and likely bad faith) for a property owner to terminate a brokerage agreement prior to entering into a sales agreement or lease just to avoid paying a real estate commission. Yet, if a property owner is...more

Key factors to consider when interpreting/construing commercial contracts

The recent English Supreme Court decision in Arnold v Britton provides important clarification of the correct approach to adopt when interpreting commercial contracts....more

Delaware Supreme Court Reinforces Importance of Clear and Precise Bylaw Provisions and Specifically Drafted Notices of Annual...

In Hill International, Inc. v. Opportunity Partners L.P., No. 305, 2015, 2015 WL 4035069 (Del. July 2, 2015), the Delaware Supreme Court affirmed the Court of Chancery’s grant of injunctive relief as it recognized the...more

Delaware Supreme Court Reinforces Importance of Clear and Precise Bylaw Provisions and Specifically Drafted Notices of Annual...

In Hill International, Inc. v. Opportunity Partners L.P., No. 305, 2015, 2015 WL 4035069 (Del. July 2, 2015), the Delaware Supreme Court affirmed the Court of Chancery’s grant of injunctive relief as it recognized the...more

Dangers of a Self-Drafted Letter Agreement

Court Unwilling to Impose a Reasonableness Limit on Expenditures - Exploration expenditures incurred to earn into a mining claim did not have to be reasonable, the B.C. Court of Appeal recently held in American Creek...more

The Meaning Of "Successors," "Members," And "Designees" In A Release

The words "successors," "members," and "designees," as used in a Release were at issue in Judge Bledsoe's Opinion last week in TaiDoc Technology Corp. v. OK Biotec Co., 2015 NCBC 71. Plaintiff TaiDoc had settled a...more

The Second Circuit Holds That Claims Against Lehman Brothers Related to Bilateral Repurchase Transactions Do Not Qualify for...

On June 29, 2015, the United States Court of Appeals for the Second Circuit affirmed the decision of the United States Bankruptcy Court for the Southern District of New York, which held that claims asserted by counterparties...more

Chancery Court Upholds Indicted Ex-Director's Advancement Rights

Advancement provides corporate officials with immediate interim relief from the personal out-of-pocket financial burden of paying the significant ongoing expenses inevitably involved with defending investigations and legal...more

What Makes a Multi-tiered Dispute Resolution Clause Enforceable?

A recent High Court decision serves as a reminder that multi-tiered dispute resolution clauses are not necessarily enforceable, and provides insight into key drafting points. Overview - Multi-tiered dispute...more

Massachusetts Appeals Court Adopts Two-Prong Continuity and Profit Motive Test to Determine Whether Business Pursuits Exclusion...

The Massachusetts Appeals Court has provided some much needed guidance on the “business pursuits exclusion” in a recent coverage dispute between a homeowners’ insurer and a commercial liability insurer. In Preferred Mutual...more

Contractual Interpretation: When Can You Stray From The Strict Wording?

For businesses and lawyers, a new test set out by the Supreme Court will help inform when one can stray from the literal words of a contract and adopt an interpretation that accords with commercial common sense. The Supreme...more

In the Wake of Heimeshoff, the 11th Circuit and Equitable Tolling of Reasonable Contractual Time Limitations

As all ERISA practitioners are now well aware, in Heimeshoff v. Hartford Life & Accident Ins Co., 134 S.Ct. 604 (2013), the United States Supreme Court provided that contractual time limitations provisions are enforceable in...more

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