LAW 506-002 – Contracts II

Restatement Second of Contracts § 203


Standards of Preference in Interpretation

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In the interpretation of a promise or agreement or a term thereof, the following standards of preference are generally applicable:

  1. an interpretation which gives a reasonable, lawful, and effective meaning to all the terms is preferred to an interpretation which leaves a part unreasonable, unlawful, or of no effect;
  2. express terms are given greater weight than course of performance, course of dealing, and usage of trade, course of performance is given greater weight than course of dealing or usage of trade, and course of dealing is given greater weight than usage of trade;
  3. specific terms and exact terms are given greater weight than general language;
  4. separately negotiated or added terms are given greater weight than standardized terms or other terms not separately negotiated.