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Interpretation of technical terms of contracts in California

On Behalf of | Jan 14, 2016 | Contract Disputes

For some businesses, it is rather common for the contracts they form with other parties to contain a variety of technical terms. Disputes sometimes come up regarding business contracts with technical terms. In some instances, these disputes center on disagreements over what technical terms in the contract mean for the purposes of the contract and what this means for the obligations of the parties.

California has a variety of different rules courts are to turn to when trying to interpret a contract and its terms in disputes over contract meaning. This includes rules on the interpretation of technical terms.

Under state law, when a contract contains technical words, they are generally to be interpreted based of how persons within the business/profession the technical words relate to usually understand the words.

There is an exception to this though. This interpretation method is not to be used if the technical terms are, in a clear way, being used in a different sense than the usually understood one.

As this illustrates, multiple factors could play a role in what meaning a given technical term in a contract is found to have, including usage of the word in the industry and the specifics of the contract.

The application of California’s contract interpretation rules can be complex. Consequently, disputes over business contract term meaning (such as disputes over technical term meaning) can raise many different issues and have very complicated aspects. Thus, when in such a dispute in the state, a business should consider obtaining the help of a business law attorney who is experienced in California contract matters and has a deep knowledge of California contract law.