Tag Archives: contractual intent

ILN Today Post

NEW YORK COURTS, NOT THE PARTIES, HAVE THE LAST WORD ON CONTRACTUAL INTENT

Under New York law, the courts interpret contracts to determine the intent of the parties. If the writing used in a contract is unambiguous, the agreement is generally enforced in accordance with its plain meaning. If the writing is ambiguous, the courts may look to evidence, outside of the four corners of the contract, to determine the parties’ intent.

Issues may arise when the language in the contract is facially unambiguous, but does not reflect the intent of the parties. In those cases, rules of contract interpretation would generally not permit courts to use extrinsic evidence because that is only allowed when the contractual language is ambiguous. However, courts are naturally reluctant to enforce provisions that were not intended by the parties, and may resort to the equitable remedy of reformation (or a rewriting of the contract) to avoid an unintended or otherwise absurd result. Two recent appellate decisions in New York help answer the question, what may the courts do if interpretation of a contract provision is unsupported by extrinsic evidence as to intent and reformation has not been requested? More…

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