A contract is “an agreement between two or more parties competent for that purpose, upon a sufficient consideration, to do or not do a particular thing which lawfully may be done or omitted.” Feenaughty v. Beall, 178 P 600 (1919). Said otherwise, it’s really easy to make a contract happen. All it takes is two people who agree to something and exchange consideration [a thing of value]. There are very few things that must actually be in a contract to make it valid at law. Major items, such as a deadline for acceptance, are not strictly required. Where the contract has vagaries or ambiguity, courts tend to opt towards an interpretation that affects the intent of the parties. If we can’t figure out what the parties meant to do, that’s when we use “canons of construction.”
Canons of construction are abstract rules of interpretation that are used to read through contracts. There are many, but they tend to have a reasonable logical strand that explains the canon:
- Ordinary meaning canon – when a word is used, we assume it has the ordinary everyday meaning unless the context indicates it has some other, specialized definition [e.g., “Day” will usually just mean calendar day because “Business Day” is a specialized concept].
- Fixed meaning canon – words are given the meaning they had when the text was written or adopted. Language grows and changes over time, but a contract is read using the language and diction of the time it was written.
- Expressio Unius Est Exclusio Alterius – “the expression of one thing implies exclusion of others.” Hence, if I say “this applies to all cars, trucks, and buses,” we can assume that it does not apply to boats or planes.
- Ejusdem Generis Canon – an expectation exists that a specific list followed by a general term results in interpreting the general term more narrowly. E.g., “All sedans, SUVs, and other vehicles.” “other vehicles” would be interpreted narrowly to “wheeled vehicles, generally roadbound cars,” rather than applying the term to any vehicle like a plane or boat.
- Presumption of Consistent Usage – we assume that a word of phrase is meant to use the same meaning throughout the text.
- General/Specific Canon – there is an assumption that specific provisions control and prevail over general provisions. Hence, if the contract says “Buyer waives all inspections,” and “Buyer retains the right to do specifically pest inspections,” the more specific provision is considered the controlling one, absent evidence of party intent otherwise.
- Absurdity Doctrine – we assume that a provision may be ignored or otherwise judicially corrected as erroneous when the provision creates a result that no reasonable person could approve. E.g., imagine a provision on the contract that was meant to say “Seller will not live in property for more than 30 days,” but through an error, was left with just the phrase “Seller will not live more than 30 days.”