Question

When a court interprets an ambiguous contract, usage of the trade will take precedence over express terms in the contract. A. True B. False

Answer 1

Answer:

A. True

Explanation:

The aim of the court when interpreting a contract, is to determine the intention of the parties to the contract. When contract terms and conditions are not ambiguous, the court will enforce the express terms of the contract as valid, without going beyond the content of the contract.

However, when the contract is ambiguous, and the parties to the contract have equal experience and good counsel, the court will determine or interpret the ambiguous contract based on the usage of the trade: that is, based on performance of contract duties, rather than the express terms in the contract. This is because it's believed that the performance/duties carried out during the execution of the contract is the best to determine or interpret what the parties to the contract intended when drafting such contract.