Opinion ID: 1961992
Heading Depth: 1
Heading Rank: 3

Heading: principles applicable to review of contract provision

Text: As well stated in Bobali Corporation v. Tamapa Company, 235 Pa.Super. 1, 340 A.2d 485 (1975) alloc. ref. construction of contract options and rights of first refusal must be in accordance with the principles of contract construction and: In construing the terms of a contract we are guided by well-defined and fundamental canons of construction. Our Supreme Court has adopted the following principles: `The cardinal rule in the interpretation of contracts is to ascertain the intention of the parties and to give effect to that intention if it can be done consistently with legal principles.' (Citations omitted.) `Contracts must receive a reasonable interpretation, according to the intention of the parties at the time of executing them, if that intention can be ascertained from their language. (citing cases.)' Percy A. Brown & Co. v. Raub, 357 Pa. 271, 287 [54 A.2d 35] (1947). Id., 235 Pa.Super. 5-6, 340 A.2d at 488. We must first look to the writing itself, for if the terms of the agreement are clear and precise, performance must be required in accordance with the intent as expressed in the agreement without resort to rules of construction or extrinsic evidence. The question before us is whether the clause containing the right of first refusal is ambiguous so as to require interpretation. It is established that the intent of the parties to a written contract is the writing itself and when the words are clear and unambiguous the intent is to be found only in the express (sic) language of the agreement. Felte v. White, 451 Pa. 137, 302 A.2d 347 (1973) (other citations omitted). Thus, it is said that the agreement that is clear and unambiguous speaks for itself and is not subject to interpretation by reference to any circumstances other than those recited in the written agreement. (citations omitted). Steuart v. McChesney & Joyce, 284 Pa.Super. 29, 424 A.2d 1375, 1377 (1981). Where, however, the terms of the agreement are ambiguous and the intent of the parties cannot be ascertained by reference to the writing, the agreement will be construed strictly against the party who prepared the agreement, particularly in the event such party is in a superior bargaining position to the other contracting party. [16] In addition, extrinsic evidence may be introduced to show the common understanding and intent of the parties at the time the contract was entered into. [17] However, no extrinsic evidence may be introduced in an attempt actually to alter, amend, add to, or detract from the terms of the contract as written. Such evidence is barred by the Parol Evidence Rule. [18] Similarly, the court, may not construe a contract in such a manner as to write a new contract for the parties, but is confined to reasonable construction of the language as actually contained in the writing. It is well-established that `The parties have the right to make their own contract, and it is not the function of this court to rewrite it, or to give it a construction in conflict with the accepted and plain meaning of the language used.' Hagarty v. Wm. Akers, Jr., Co., Inc., 342 Pa. 236, 239 [20 A.2d 317] (1941); R.F. Felte, Inc. v. White, 451 Pa. 137 [302 A.2d 347] (1973). Bobali Corporation v. Tamapa Company, supra, 235 Pa. Super. 6, 340 A.2d at 488.