Opinion ID: 1608832
Heading Depth: 1
Heading Rank: 2

Heading: interpretation of contracts

Text: In interpreting contracts, we are guided by the general rules contained in articles 2045-2057 of the Louisiana Civil Code. The cardinal rule is set forth in La.Civ.Code art. 2045, which states that the interpretation of a contract is the determination of the common intent of the parties. To determine the parties' intent, courts must first look to the words and provisions of the contract. When they are clear and explicit, no further interpretation may be made in search of the parties' intent. La. Civ.Code art. 2046. Stated differently, when the language of the contract is unambiguous, the letter of the clause should not be disregarded under the pretext of pursuing its spirit. La.Civ.Code art. 2046, comment (b); Cashio v. Shoriak, 481 So.2d 1013, 1015 (La. 1986), citing Maloney v. Oak Builders, 256 La. 85, 235 So.2d 386 (1970). Notwithstanding, Article 2046 establishes an exception to this rule. Even when the language of the contract is clear, courts should refrain from construing the contract in such a manner as to lead to absurd consequences. Cashio, supra, citing Texaco v. Vermilion Parish School Board, 244 La. 408, 152 So.2d 541 (1963), and National Roofing and Siding Co. v. Giaise, 434 So.2d 85 (La.App. 5th Cir. 1982), writ denied, 435 So.2d 443 (La.1983). To determine the meaning of words used in a contract, courts should give them their generally prevailing meaning. However, words of art and technical terms must be given their technical meaning when the contract involves a technical matter. La.Civ. Code art. 2047; Schroeder v. Board of Supervisors, 591 So.2d 342, 345 (La.1991) (citations omitted). If a word is susceptible to different meanings, it must be interpreted as having the meaning that best conforms to the object of the contract. La.Civ.Code art. 2048. A contract provision that is susceptible to different meanings must be interpreted with a meaning that renders the provision effective, and not with one that renders it ineffective. La.Civ.Code art. 2049; John Bailey Contractor, Inc. v. State, Through the Department of Transportation and Development, 439 So.2d 1055, 1058 (La.1983) (citations omitted) (Courts will not impute to the parties the use of language without meaning or effect.). Each provision in a contract must be interpreted in light of the other provisions so that each is given the meaning suggested by the contract as a whole. La. Civ.Code art. 2050. Doubtful provisions must be interpreted in light of the nature of the contract, equity, usages, the conduct of the parties before and after the formation of the contract, and of other contracts of a like nature between the same parties. La.Civ. Code art. 2053; John Bailey Contractor, Inc., supra . Equity is based on the principle that no one is allowed to take unfair advantage of another and that no one is allowed to enrich himself unjustly at the expense of another. Usage is a practice regularly observed in affairs of a nature identical or similar to the object of a contract subject to interpretation. La.Civ.Code art. 2055.