Key Questions of Contract Interpretation in Government Contracts

Contract interpretation is the most litigated issue in commercial law, especially in government contracting. This program, presented by Nicholas Solosky (materials prepared by Kenneth J. Allen), explains and illustrates the key principles of contract interpretation. First, it will clarify some misunderstood "types" of government contracts and rules involving the content of a government contract, including the parol evidence rule and the government's duty of good faith and fair dealing. Next, it will cover the process of interpretation employed by the courts before discussing principles that only pertain to the words of the contract, the "intrinsic evidence" of contract interpretation. It will explain what an "ambiguous" contract is, and the application of the Plain Meaning Rule, a rule that applies in some US jurisdictions, and in government contract litigation, as a pre-condition to considering outside (extrinsic) information to interpret a contract. The program will then cover the four main types of extrinsic evidence.

Finally, after discussing the applicable principles, the program will discuss what happens if the interpretation dispute is still unresolved. All the principles will be explained by reference to the Restatement (Second of Contracts) and with quotes from recent cases that illustrate them. Practical exercises will also be worked in to reinforce the principles.

Learning Objectives:

1. Discuss the process of contract interpretation in federal contract litigation
2. Review the correct application of the parol evidence rule and the Government's duty of good faith and fair dealing; the principles that apply only to the words of the contract document, to include the role of dictionaries, and the FAR's hierarchy of definition; what an "ambiguous" contract is; the role of the Plain Meaning Rule in conditioning consideration of information from outside the contract; and the four key  types of extrinsic information, and how they are applied to interpret ambiguous contracts
3. Weigh the preferences the law has in competing interpretations
4. Apply contra proferentem in federal contract litigation to include its two major exceptions