The Contract Interpretation Two-Step: Step One, Ambiguity Determination and Step Two, the Battle of the Two Reasonable Meanings

Abstract

This article clarifies the two-step approach used by the courts to analyze contract interpretation issues and introduces the concept of the ‘Battle of the Two Reasonable Meanings’. The academic debate, which centers around whether the textualist approach (plain meaning and four corners of the document approach) or contextualist approach (use of outside evidence) is better, is a false dichotomy, both approaches are used, albeit in different steps (textualist at Step 1 and contextualist at Step 2) in the contract interpretation analysis.