The first principle of contract law is to protect the reasonable expectations of the parties. The first step in doing this is to be able to confirm what those expectations are (or what they should have been)—to determine whose meaning is the right one.
In an effort to reduce subjectivity in the process, the courts have sought to develop an objective standard. The standard of a “reasonable expectation” has accordingly been described as the meaning that would be attached by normally intelligent people competent in their profession, with complete knowledge of all related facts.
Application Rules. The following ideas will aid in the application of the principle as described above:
1. The ordinary meaning of language is given to words unless circumstances show that a different meaning is applicable.
2. Technical terms and works of art are given their technical meaning unless the context indicates a different meaning.
3. A writing is interpreted as a whole, and all writings forming a part of it are interpreted together.
4. All circumstances are taken into consideration.
5. If the conduct of the parties defined a particular interpretation, that meaning is adopted.
6. Specific terms are given greater weight than is general language.
7. Separately negotiated or added terms are given greater weight than standardized terms (boilerplate) or terms that are not specifically negotiated.
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