Browsing by Subject "Contract interpretation"

This thesis examines contractual interpretation in the United States and the Nordics. The effect of the entire agreement clause on the interpretation process is also examined. The purpose is to identify the main differences and similarities in the U.S. common law and the Nordic civil law approaches to interpretation and enforcement of the entire agreement clause. The principles of contractual interpretation are very similar among the Nordic countries, which allows the Nordics to be discussed as a single entity in relation to interpretation. In the United States, however, we can see a lot of variety in contractual interpretation matters, and not just between states but within the states themselves. Contract law (and contractual interpretation) is mostly governed by state law, which is why very few generalizations can be made that would be representative of every state. In some states contractual interpretation has also been incorporated into statutes. In the Nordics, there are no statutes regulating contractual interpretation; instead, interpretation is guided by general principles. The first part of the thesis concentrates on contractual interpretation in the United States. First, after an introduction to the common law system and sources of law, the entire agreement clause (which originates in Anglo-American law) is studied. Second, the parol evidence rule, which is a unique common law phenomenon and serves a similar purpose as the entire agreement clause, is examined. The focus of the study then moves onto examining the three different theories of interpretation: literalism, objectivism, and subjectivism, after which the interpretation process in general in discussed. Objectivism and the four corners and plain meaning rules stand out in this part of the research. The second part of the thesis focuses on contractual interpretation in the Nordics. The enforcement of the entire agreement clause is also discussed. Objectivism and subjectivism are also addressed from a Nordic point of view, but the general principles of interpretation discussed are not arranged under either label since the interpretation material available for interpretation in the Nordics includes both types of evidence. The interpretation process in general is also examined. The third part comprises of a comparison of contractual interpretation in the U.S. and the Nordics as well as differences in the enforcement of the entire agreement clause. The final part summarizes these findings. The main goal of contractual interpretation, determining the common intention of the parties, is the same in both jurisdictions. The difference is in the way of achieving that result. The main conclusion is that interpreters in the Nordics have more tools at their disposal to reach an optimal interpretive result, as both objective and subjective evidence are always available to aid in the interpretation process. In the U.S., an objective approach to interpretation is favored by most U.S. courts, and the four corners of the contract and the plain meaning rule are emphasized at the start of the interpretive process. Generally, an ambiguity is required to allow extrinsic evidence. In the Nordics, there is no ambiguity requirement. The availability of subjective evidence is not a given in the U.S. like it is in the Nordics. The principles of contractual interpretation presented in the Restatement (Second) of Contracts in the U.S. mirror the Nordic principles closely; however, the adaption of these principles is at the discretion of the courts. The entire agreement clause is generally enforced in the U.S. where greater emphasis is given to written agreements. In the Nordics, however, the effect of the entire agreement clause can be described persuasive at best. Therefore, the conclusion is that the position of the entire agreement clause in the Nordics is weak compared to the U.S.