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The title sort of says it all, I'm wondering if a contract would be read differently or more literally if written, or signed, by a trained lawyer then if it was done by layman.

So let's say that I sign a contract with someone that has an ambiguous statement in it, one where strict reading of the words as written would imply X, but from context, it seems likely that the statement was actually meant to imply Y instead. For now, let's say I am arguing I read the contract as meaning X when I signed it, and the writer of the contract is trying to argue they meant Y.

As I understand it whether the contract is read as meaning X or Y is enforceable is dependent on what is the most reasonable reading. If it takes an excessively literal reading to get X, and any sane person would infer Y then Y is what is enforceable. If a sane person would instead likely view X as being the intent, then X is what is enforceable even if Y was what the writer had intended.

But what if it's ambiguous which reading is most reasonable, would it matter rather the writer of the contract was a trained lawyer, or a layman like me? Could I argue that a the writer was a lawyer and should know how to write a contract and so they should have understood the literal interpretation of the clause was X and thus has no legal grounds for claiming they meant Y? If instead the writer was another layman, would they be more likely to be able to argue they meant the obvious interpretation Y and that literal reading X was just bad writing of someone who didn't know what they were doing?

The same argument could be made in reverse as well, if instead I wrote the contract and had meant literal interpretation X and the signer claims they thought the contract meant 'reasonable' interpretation Y, would the signer being or not being a lawyer affect rather I can claim they should reasonable have believed X was intended?

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    I'll note that the court's interpretation of a contract may also depend on whether it's a contract of adhesion.
    – Brian
    Jan 6, 2023 at 14:59

4 Answers 4

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It doesn't matter. When a contract is left ambiguous the interpretation that is used is the one that is the most favorable to the party that did not draft the contract, under the logic that if the party that did draft the contract chose all the wording and thus, they could have stated their interpretation in the contract just avoided this whole mess in the first place.

A similar rule exists in criminal law, where if the law is ambiguous, the interpretation used is the one most favorable to the defendant, since the state could have drafted it in a way that made their interpretation clear.

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    I think the OP's premise is that a professional lawyer would know to state things less ambiguously and in their client's favor, but a layman might not realize the loopholes he left open. Would the court take this into account?
    – Barmar
    Jan 6, 2023 at 15:10
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    Or is it "Too bad, you should have hired a lawyer."?
    – Barmar
    Jan 6, 2023 at 15:11
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    I think the reference to ambiguity in the question is broadly construed to cover any kind of lack of precision arising from a literal reading of explicit statements. This does not necessarily mean that the contract is legally ambiguous, because in context the parties may still clearly have had a shared understanding of a more precise implicit meaning of the contract, and it's within a court's purview to make such a judgement.
    – Will
    Jan 6, 2023 at 16:48
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    Of course, that's the whole premise of the question. The question as I understand it is: If you're not a lawyer, will the court take this into account and give you some latitude if you didn't write the contract as carefully as a lawyer would have?
    – Barmar
    Jan 6, 2023 at 18:30
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    @hszmv "a item hanging under a price tag is a contract (The store will give you the item if you give them the value on the price tag)." That doesn't sound true - otherwise if the store refused you service (which they are allowed to do for any legal reason) they would be in breach of contract.
    – kaya3
    Jan 7, 2023 at 11:46
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Contractual interpretation is conducted in light of the surrounding circumstances. See Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 33, para. 58 (citations omitted):

The nature of the evidence that can be relied upon under the rubric of “surrounding circumstances” will necessarily vary from case to case. It does, however, have its limits. It should consist only of objective evidence of the background facts at the time of the execution of the contract, that is, knowledge that was or reasonably ought to have been within the knowledge of both parties at or before the date of contracting. Subject to these requirements and the parol evidence rule discussed below, this includes, in the words of Lord Hoffmann, “absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable [person]”. Whether something was or reasonably ought to have been within the common knowledge of the parties at the time of execution of the contract is a question of fact.

More sophisticated parties will be understood to have (or should have had) different things in mind than unsophisticated parties when negotiating and executing agreements. See e.g. NOV Enerflow ULC (NOV Pressure Pumping ULC) v. Enerflow Industries Inc., 2020 ABQB 347:

Based on the above analysis, I find the parties to the PSA had QMS in mind when they executed the agreement. Given the sophistication of the parties, I find they chose to limit the QMS reference to one provision. If the parties had intended to go further and agree to representations concerning the Enerflow QMS, they could have done so. They did not do so.

See also 1548 Richmond Manor Inc. v. Fido Solutions Inc., 2019 ONSC 3833:

The Lease does not give the Tenant a right to be consulted on any development plan, or create a corresponding duty to consult on the Landlord. As both are sophisticated commercial parties, if they intended to create such rights and duties, they would have been included in the Lease.

Contrast this with Khajavi v. Eghtesadi, 2016 BCSC 1127, in which the judge was willing to understand an arguably ambiguous or uncertain contract as binding, in part because, "both parties are unsophisticated."

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    For anyone else curious about what specifically happened in the Khajavi v. Eghtesadi case cited at the end, here's the link: 2016 BCSC 1127 Jan 6, 2023 at 19:13
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Contract interpretation is about language and context and what they mean to a reasonable person

Who drafted the contract does not generally enter the analysis although contra proferentem is an available, if rarely used tiebreaker.

The purpose of the interpretation of a contract is not to discover how parties understood the language of the text; the aim is to determine the meaning of the contract against its objective contextual scene.

Recent jurisprudence from the High Court in Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7 (5 March 2014) reaffirmed the High Court’s (and therefore all Australian court’s) approach.

  1. Focus on objective meaning;

  2. Consider language, surrounding circumstances, commercial purpose or objects;

  3. Purpose or objects are informed by genesis, background, context and market; and

  4. Adopt a businesslike interpretation (a commercial result not commercial nonsense or inconvenience).

The decision in Verve v Woodside supports the idea that contract interpretation involves drawing conclusions based on the spirit of the text within what we know about the text. It is the drawing of conclusions respecting subjects that lie beyond the direct expression of the text from the elements known from and given in the text – conclusions which are in the spirit, though not within the letter of the text.

For your example, if the plain meaning is X, and X is not absurd given the context, then it means X even if Y is more in line with the objectives of the contract. However, if if the words could support X or Y and Y is a better fit, then it means Y.

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Yes, courts consider the parties’ expertise or “sophistication” when interpreting contracts. See Meredith R. Miller, Contract Law, Party Sophistication and the New Formalism, 75 Missouri Law Review 493 (2010):

Party sophistication has tremendous, increasing significance in the interpretation of the express terms of a contract. Where parties are not sophisticated, a more relaxed, less literal approach is applied. Courts generally refer to party sophistication when determining whether to consider alleged additional terms that were not included in the written contract and when determining whether to consider extrinsic evidence in interpreting the written terms …

Further, a well-established exception to the parol evidence rule arises when the written document contains an ambiguity – language that is susceptible to more than one reasonable interpretation. When an ambiguity exists, courts will consider extrinsic evidence to interpret the ambiguous term. In determining whether the language of a contract is ambiguous, courts have also looked to the sophistication of the parties …

Likewise, once a court determines that an ambiguity exists, it generally applies the traditional canon of interpretation – contra proferentum. However, many courts will not construe ambiguous language against the drafter of the contract where both parties are sophisticated …

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