Add Recapitalization Agreement Countersignature with airSlate SignNow

Countersignature succession agreement

the canons of construction is a collection of rules that courts will apply when determining the meaning of intrinsic evidence in other words the canons of construction are a collection of common techniques that judges often use when construing the meaning of a writing i deliberately said that the canons of construction apply to writings not just to contracts that is because canons can also be used to construe regulations statutes and even the constitution in this book however we focus on the canons of construction that specifically apply to contractual writings think about each rule of construction as a tool just as a complete set of tools needed for a job constitutes a toolbox a complete set of rules needed to understand a writing are grouped into a set of canons of construction but just as an electrician's toolbox is likely to be different from a plumber's toolbox different collections of rules are needed for different interpretative tasks another way to think about the canons of construction is to compare them to the rules of grammar and style even a very long grammar and style manual like the chicago manual of style may not contain every rule older grammar books for example will not have rules about how to cite a twitter tweet and some of the rules such as whether to include the oxford comma in a list are not universally agreed upon still the chicago manual of style remains a very useful guide on how to write effectively likewise there is no one set of cannons of construction that apply to all circumstances and in all courts in fact various courts have come up with their own very specific rules but there is broad agreement on many general principles and some specific rules are so important as to be widely accepted and appearing universally for the present purpose of teaching you how to perform contractual interpretation i have assembled the following sets of rules in canons of construction for our class the rules i have selected are generally accepted and nearly universal so you can feel confident about applying them beyond this class but keep in mind it is possible to use other rules and techniques when construing the meaning of written words in contractual interpretation the plain meaning rule states that ordinary words should be used according to their plain or dictionary meanings for example a contract prohibiting sale of liquor would not prohibit sales of beer the technical meeting rule states that courts should use technical or specialized terms according to their technical or specialized meetings when both parties are in the same technical or specialty field for example in a sales contract between a shoe manufacturer and a shoe retailer for 300 mules this word has a technical meaning of a shoe with no back strap and not an animal another example is a contract to supply materials for a construction project that includes four tons of light iron if the trade usage is that light iron is supplied with its supplemental steel then the supplier is obligated to provide that steel note that in both of these examples the technical meaning trumped the plane meaning where both parties were in the same technical field the general terms rule holds that general terms are given their general meaning and are not arbitrarily limited for example a contract for the lease of a fair ground that prohibits the sale of quote intoxicating beverages end quote would prohibit sales of beer and wine in addition to liquor the negative implication rule holds that the expression of one thing implies exclusion of others for example a sales agreement defines the items for sale as quote all bci inventory including but not limited to agricultural chemicals fertilizers and fertilizer materials sold by bci to sylvan end quote despite the including but not limited to language the inclusion of these specific items implies that all other items are excluded the whole agreement rule states that where a single transaction requires several different agreements they should all be interpreted as one single agreement for example in a venture capital financing the investment agreement defines shares to mean series a preferred stock the term shares in the related purchase agreement has the same meaning the rule to avoid surplusage holds that courts should choose an interpretation that gives force and effect to every word and every provision in an agreement for example a contract says quote vessel to be loaded in turn end quote and quote vessel to be loaded promptly end quote this means the vessel will be loaded promptly when it is that vessel's turn to be loaded the consistent usage and meaningful variation rule holds that courts should interpret the same terms in a contract in the same way and conversely a material variations in terms suggests a variation in meaning for example section 1 of a director and officer insurance agreement defines the term insured as any executive director or officer section 6 of that same agreement says this policy does not apply to injury to property in the care or control of the insured section 6 does not exclude coverage of company property in the control of employees because employees was not within the original definition in this contract of the term insured the negotiated terms rule holds that separately negotiated or added terms should be given greater weight than standardized terms or boilerplate language for example section 4c of a construction agreement prepared by a contractor contains pre-printed language that quote contractors shall charge a lump sum for any changes in the work end quote section 5 of that same agreement includes a remark in the purchaser's handwriting initialed by the contractor that quote contractors shall charge a 10 percent fee net of cost for changes end quote section 5 prevails because it was separately negotiated the same kind class or nature rule presumes that general terms derive meaning from specific terms that precede them therefore where general words follow an enumeration of two or more things those general words only apply to persons or things of the same general kind or class for example a contract for sale of a farm includes transfer of quote horses cattle sheep pigs goats and any other farm animals end quote despite the seeming breath of the general term any other farm animals the specific items on this list are only four-legged hoofed mammals typically found on farms the general term is thus limited to other similar animals and therefore chickens are not included in the sale of the farm the recognition by association rule holds that words grouped in a list should be given related meaning for example in a flood insurance agreement covered loss includes damage from quote flood surface water waves tidal water tidal waves overflow of streams or other bodies of water or spray from any of the foregoing all whether driven by wind or not end quote the category of this list is inundation from natural sources therefore flood does not include damage from a broken water main the grammar rule states that words are to be given the meaning that proper grammar and usage would assign them this means that things that may seem trivial such as the placement of a comma or the use of an apostrophe can change the entire meaning of a contract for example in a contract to use telephone poles for cable tv wires the contract stated quote subject to the termination provisions of this agreement comma this agreement shall be effective from the date it is made and shall continue in force for a period of five years from the date it is made comma and thereafter for successive five-year terms comma unless and until terminated by one year prior notice in writing by other party end quote the second comma in the disputed phrase meant that the termination clause applied to both the initial terms and to renewal terms the legal meaning rule presumes that contracts are made for lawful purposes therefore if a term is susceptible to two reasonable constructions one of which comports with law and one of which does not construe the term in such a way that it is legal and enforceable for example a mortgage company who was holding a foreclosure auction for real property made an oral promise to the seller of the property that the mortgage company would bid enough at the foreclosure auction to cover principle and interest of the existing loan on that property instead of interpreting this as an oral agreement to purchase land which is unenforceable under the statute of frauds the court interprets this as a promise to start the bidding at a price which would cover the existing loan and that promise is enforceable even though it is not evidenced by assigned writing in addition to the semantic which deal with looking at terms and understanding them based on rules of construction and language there are also so-called policy cannons policy cannons do not really have to do with semantic meaning per se but rather have to do with how contracts can generally be interpreted in a way that's good for society the policy cannons include one there is a duty of good faith and fair dealing implied in every contract two when the semantic cannons cannot make meaning of an agreement choose the meaning that favors the party who did not write the agreement in other words prefer an interpretation against the drafter three when the cannons of construction fail and when construction against the drafter is not applicable either because the parties had equal bargaining power or because it is clear that neither one nor the other did all of the drafting we should default to an interpretation that favors the public interest and four if a contract term is unconscionable it should not be enforced in summary we have discussed semantic canons of construction which are rules courts will use to determine the meaning of written terms in other words techniques courts will use to discern the meaning from intrinsic evidence and we've discussed policy cannons which courts will use especially when the semantic cannons do not arrive at a definitive meaning to ensure that contracts benefit the public interest as you might have surmised at this point sometimes cannons of construction are in tension with each other for each cannon that supports a particular interpretation there is often another canon that can be used to defeat that interpretation as lawyers to use the canons of construction effectively it's important to use the canons in the context of their purpose and to establish reasons and to state your reasoning for why a particular canon should apply to this text especially where multiple canons could derive different meanings from a written agreement your goal as an advocate is to make your analysis of how the canons of construction apply more persuasive than others