It is almost impossible to go through life in the United States without reading and trying to understand a contract, law, or constitutional provision. In fact, most of us regularly wonder what a particularly confusing contract means, how far "Stand-Your-Ground" laws go, or what religious freedoms are and are not protected by the First Amendment. Whenever we try to understand the real meaning of a contract, a piece of legislation, an already enacted law, or even the Constitution, we are engaged in what is called statutory interpretation or contractual interpretation.

As the name indicates, statutory interpretation applies to divining the underlying meaning of laws and statutes, while contractual interpretation applies to trying to understand the true purpose and meaning of a contract. When engaging in this kind of interpretation, courts use certain legal principles, and maxims that have been firmly established in legal precedent. While these maxims are too numerous to exhaustively list, a few of the important ones are helpful to consider in trying to better understand how this interpretation takes place. One of the central principles of interpretation is called the Plain Meaning Rule. This rule basically states that unambiguous language in a contract or law will be read to mean exactly what it says, and that the words employed are taken to be a final expression of the meaning intended. This prevents someone from claiming that words in a contract are wholly meaningless; it makes it difficult for someone to say, for example, that "yes" means "no" in a contract. Another basic principle is that specific provisions will take precedence over general language. For example, if a contract states that "X individual will sell his car for $1000," but also states that "this contract will provide a fair deal between the parties", the precedence of specific over general provisions will often prevent someone from making a successful claim that the requirement to sell his car for the stated $1000 should be voided because the deal isn't 'fair' now that he's realized the value is actually $1300.

In addition to the principles explained above, other important tools used in contractual interpretation include, referring to custom and ordinary course of business, attempting to prevent any contractual provision from being interpreted in such a manner that it does not exist or gets deleted from the contract, and looking to the meaning of words at the time/place they were written. Only when a contract is ambiguous can a court look outside the contract (for example to the verbal statements made by the parties when entering into the contract, or previously rejected drafts of the contract) in order to interpret it. This prohibition in looking beyond the 'four corners' of the contract in the absence of ambiguity is called the Parol Evidence Rule. There are, of course, many other legal principles which apply to both statutory and contractual interpretation, but just those mentioned should be helpful in understanding some the basic pieces that go into this important process.

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