Rules of construction: Overview, definition and example
What are rules of construction?
Rules of construction refer to the principles or guidelines used to interpret and understand the terms and provisions of a contract. These rules help resolve ambiguities or inconsistencies in the contract by providing a framework for how the document should be read, understood, and applied. They can address issues such as the interpretation of specific words or phrases, the order of precedence between conflicting provisions, and the intent of the parties involved.
For example, rules of construction might specify that words used in the singular include the plural, or that the headings in the contract are for convenience only and do not affect the interpretation of the provisions.
Why are rules of construction important?
Rules of construction are important because they provide clarity and consistency in interpreting the terms of a contract. Without these rules, parties could have different interpretations of key provisions, leading to confusion, disputes, or litigation. By establishing clear guidelines for how the contract should be read, rules of construction ensure that both parties are on the same page and that the contract’s intent is upheld.
Including rules of construction in contracts reduces the risk of ambiguity and promotes fair and predictable outcomes if a dispute arises.
Understanding rules of construction through an example
A contract includes a clause stating that "the seller shall deliver the goods within 30 days of receiving the order." The rules of construction in the contract specify that "days" refers to calendar days, not business days. This ensures that both parties have a shared understanding of the time frame for delivery, avoiding confusion or misinterpretation.
An example of a rules of construction clause
Here’s how a rules of construction clause might appear in a contract:
“The following rules of construction shall apply to this Agreement: (1) The singular shall include the plural and vice versa; (2) References to a gender shall include both genders; (3) Headings and titles are for convenience only and shall not affect the interpretation of the provisions; (4) Any reference to 'days' shall mean calendar days unless otherwise specified.”
Conclusion
Rules of construction are essential for ensuring that the provisions of a contract are interpreted consistently and in accordance with the parties’ intentions. By establishing clear guidelines for interpretation, these rules help prevent misunderstandings and disputes. A well-drafted rules of construction clause provides clarity, ensures fairness, and supports the smooth enforcement of the contract.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.