Ambiguity taxonomy
Interpretation · Jan 11
Soft re-entry from winter break; opening Module V on what contracts mean
Floor. ~40 min: Fall recovery + R2d § 200 (what interpretation is) + the ambiguity definition (R2d § 201) + patent vs. latent. The framework the next three classes assume.
Target. ~75 min: Floor + plain-meaning rule + the intrinsic-then-extrinsic hierarchy + strategic incentives + objective interpretation.
All fall we asked: does a contract exist? Offer, acceptance, consideration, defenses.
Now the question changes: given that a contract exists, what does it mean?
R2d § 200: "Interpretation of a promise or agreement or a term thereof is the ascertainment of its meaning."
Three audiences live inside that question:
R2d § 201 (and the casebook): a term is ambiguous when it is reasonably susceptible to more than one meaning.
Note the standard: not "the parties disagree," but reasonably susceptible — the term must be objectively capable of two readings.
Ambiguity is a threshold question. Courts ask it first, by reading the contract's four corners. Only if a term clears that threshold does the court move on to resolve which meaning controls.
Strategic stakes. Whether a term is "ambiguous" decides whether outside evidence comes in at all.
Where a term is not ambiguous, courts give words their ordinary meaning — the plain-meaning rule — and read the contract within its four corners.
Plain meaning serves predictability: parties can rely on what their words ordinarily mean, and courts avoid rewriting deals after the fact.
But plain meaning is a starting point, not always the finish. A term that seems plain can prove latently ambiguous on application (Peerless), and the realist tradition (R2d) directs courts toward the parties' actual intent when the literal words would mislead.
Once a term is ambiguous, courts resolve it on a ranked ladder of evidence. Intrinsic first; extrinsic only if intrinsic fails.
Intrinsic (inside the four corners):
1. Plain meaning of the words
2. Specific / defined terms (over general language)
3. Structure (headings, placement, arrangement)
Extrinsic (outside the writing):
4. Course of performance (how the parties acted under this contract)
5. Course of dealing (their prior transactions)
6. Trade usage (industry meaning)
7. Parol evidence (preliminary negotiations)
Ambiguity is never neutral. Each side argues the reading — and the threshold label — that helps it win.
Whose meaning controls? The common law answers objectively.
From Frigaliment (preview): "The making of a contract depends not on the agreement of two minds in one intention, but on the agreement of two sets of external signs — not on the parties' having meant the same thing but on their having said the same thing."
Interpretation reads the manifestation, not the private thought — the same objective theory that governed formation in the fall, now governing meaning.
Welcome back. Spring orientation. Module V reads contracts after they are formed. Interpretation (R2d § 200) is the ascertainment of meaning. A term is ambiguous when reasonably susceptible to more than one meaning — a threshold question courts ask first, by reading the four corners. Patent ambiguity shows on the face; latent ambiguity surfaces only on application (Peerless). Courts resolve ambiguity on a ranked ladder — intrinsic before extrinsic. The question we did not yet answer: once a term is ambiguous and the court assigns the burden, who proves which meaning wins? Class 28 picks up Frigaliment, Raffles, and the ambiguity-burden rules.
Next class: Ambiguity: Patent vs. Latent; the Frigaliment Problem
_Interpretation_ · Jan 14
Read Frigaliment v. B.N.S. International and re-read Raffles v. Wichelhaus. The contract said "chicken." The seller shipped stewing fowl. The buyer wanted broilers. Both sides had reasons. When the word means two things, who proves which one wins, and how? Come ready to answer. You may be called.
Fall in one frame. A contract needs formation — offer (R2d § 24), acceptance, and consideration (the bargained-for exchange) — and must survive the defenses: capacity, the Statute of Frauds, mistake, misrepresentation, duress, undue influence, unconscionability.
Formation asks: did the parties agree? Defenses ask: is that agreement nonetheless unenforceable?
Spring's interpretation module assumes a valid contract and asks a third question: what does it mean?