Contract Interpretation

According to an article by Richard Orsinger, the most basic concept of contract interpretation in Texas is not explicitly stated by the courts, but it is inherently and nearly all they do: it is the idea that a contract is interpreted objectively and not subjectively.

The classical view of contract interpretation grew up in the USA in the latter part of 19^th century, and was dominate in American law throughout the 20^th century. The classical view of contract interpretation ignored what the contracting parties thought they had bargained to be and instead considered what a reasonable third party would interpret the words of the contract to mean. This approach relied on the judge to interpret the words of the contract, assisted by standard rules of construction that did not vary from case to case.

The primary duty of court when instructing a deed or a contract is to ascertain the intent of the parties from all the language in the deed by the fundamental rules of construction known as the “four corners rule.” This rule requires the court to look at the words of the contract, not prior drafts of the contract, or exchanges of letters, or other documents to determine the intent of the parties.

In family law, pre and postnuptial agreements will be interpreted by the courts by these principles. In area of divorce law, the Texas courts will be required to use contract interpretation case law in order to interpret prenuptial agreement in high asset divorces and sometimes in small asset divorces.