New York Business Litigation: How Courts Interpret Contracts  

To a large extent, modern business is built on the foundation of contract law. Indeed, one could argue that companies could not function without contracts. Because modern business involves so many contracts, a large percentage of business-against-business litigation involves various allegations of breach of contract. For this reason, knowing how New York courts interpret contracts is essential. Proven and experienced New York business attorneys like the litigation team at Wright Law Firm NYC will understand these rules of interpretation. Here is a brief overview of some of the more essential concepts.

Intent and the “Four Corners”

 When interpreting a contract, the court’s goal is to give effect to the party’s intent to the contract. The plan is generally interpreted as the parties’ purpose when the contract was formed. This prevents litigants from arguing for a different meaning of the contract after litigation has begun, based on the current intent of the parties when business, financial and other circumstances may have changed.

Further, when attempting to discern the parties’ intent, New York courts will read the contract and determine the meaning from within the “four corners” of the contract. Generally, business contracts are in writing (although oral contracts and contracts-by-conduct are enforceable). New York courts will not look beyond the “four corners” of the contract if the meaning of the contract and the intent of the parties is clear. This prevents litigants from arguing for a different purpose of the contract based on other facts (like what was said by one party or the other during contract negotiations).

Plain Meaning of Words

 Concerning words used in a New York business contract, courts will enforce an agreement according to the plain meaning of its terms.

Holistic and Harmonious Interpretation

 New York courts are tasked with interpreting a business contract from a holistic vantage point and harmonizing all of the provisions (as much as possible). Courts will read a contract as a whole to determine its meaning and the party’s intent. When confronted with potentially conflicting provisions, courts are expected to interpret the contract in a way that gives effect to all provisions while still giving effect to the contract’s general or primary purpose. In this regard, courts are instructed that they should not, by interpretation, “… add or excise terms, nor distort the meaning of those used and thereby make a new contract for the parties under the guise of interpreting the writing.” See Matter of Olszewski v. Cannon Point Assn., Inc., 148 A.D.3d 1306 (2017).

Contact the Business Law Litigation Team at Wright Law Firm NYC Today

For more information or if your business is being sued or you want to initiate litigation, call the experienced New York City business law litigation team at Wright Law Firm NYC. We provide top-tier litigation services in both state and federal courts. To schedule a consultation, please get in touch with our office by e-mail or call us at (212) 619-1500.