CACI 314 Interpretation—Disputed Words

California Civil Jury Instructions CACI

314 Interpretation—Disputed Words

[Name of plaintiff] and [name of defendant] dispute the meaning of the following words in their contract: [insert disputed language].

[Name of plaintiff] claims that the words mean [insert plaintiff’s interpretation]. [Name of defendant] claims that the words mean [insert defendant’s interpretation]. [Name of plaintiff] must prove that [his/her/nonbinary pronoun/its] interpretation is correct.

In deciding what the words of a contract mean, you must decide what the parties intended at the time the contract was created. You may consider the usual and ordinary meaning of the language used in the contract as well as the circumstances surrounding the making of the contract.

[The following instructions may also help you interpret the words of the contract:]

Directions for Use

Give this instruction if there is conflicting extrinsic evidence as to what the parties intended the language of their contract to mean. While interpretation of a contract can be a matter of law for the court (Parsons v. Bristol Development Co. (1965) 62 Cal.2d 861, 865 [44 Cal.Rptr. 767, 402 P.2d 839]), it is a question of fact for the jury if ascertaining the intent of the parties at the time the contract was executed depends on the credibility of extrinsic evidence. (City of Hope National Medical Center v. Genentech, Inc. (2008) 43 Cal.4th 375, 395 [75 Cal.Rptr.3d 333, 181 P.3d 142].)

Read any of the instructions (as appropriate) on tools for interpretation (CACI Nos. 315 through 320) after reading the last bracketed sentence.

Sources and Authority

Contract Interpretation: Intent. Civil Code section 1636.

Contracts Explained by Circumstances. Civil Code section 1647.

“Juries are not prohibited from interpreting contracts. Interpretation of a written instrument becomes solely a judicial function only when it is based on the words of the instrument alone, when there is no conflict in the extrinsic evidence, or a determination was made based on incompetent evidence. But when, as here, ascertaining the intent of the parties at the time the contract was executed depends on the credibility of extrinsic evidence, that credibility determination and the interpretation of the contract are questions of fact that may properly be resolved by the jury.” (City of Hope National Medical Centersupra, 43 Cal.4th at p. 395, footnote and internal citations omitted.)

“This rule—that the jury may interpret an agreement when construction turns on the credibility of extrinsic evidence—is well established in our case law. California’s jury instructions reflect this (Judicial Council of Cal. Civ. Jury Instns. (2008) CACI No. 314) … , as do authoritative secondary sources.” (City of Hope National Medical Centersupra, 43 Cal.4th at pp. 395−396, internal citations omitted.)

“The trial court’s determination of whether an ambiguity exists is a question of law, subject to independent review on appeal. The trial court’s resolution of an ambiguity is also a question of law if no parol evidence is admitted or if the parol evidence is not in conflict. However, where the parol evidence is in conflict, the trial court’s resolution of that conflict is a question of fact and must be upheld if supported by substantial evidence. Furthermore, ‘[w]hen two equally plausible interpretations of the language of a contract may be made … parol evidence is admissible to aid in interpreting the agreement, thereby presenting a question of fact which precludes summary judgment if the evidence is contradictory.’ ” (WYDA Associates v. Merner (1996) 42 Cal.App.4th 1702, 1710 [50 Cal.Rptr.2d 323].)

“In interpreting a contract, the objective intent, as evidenced by the words of the contract is controlling. We interpret the intent and scope of the agreement by focusing on the usual and ordinary meaning of the language used and the circumstances under which the agreement was made.” (Lloyd’s Underwriters v. Craig & Rush, Inc. (1994) 26 Cal.App.4th 1194, 1197–1198 [32 Cal.Rptr.2d 144], internal citations omitted.)

“Ordinarily, even in an integrated contract, extrinsic evidence can be admitted to explain the meaning of the contractual language at issue, although it cannot be used to contradict it or offer an inconsistent meaning. The language, in such a case, must be ‘ “reasonably susceptible” ’ to the proposed meaning.” (Hot Rods, LLC v. Northrop Grumman Systems Corp. (2015) 242 Cal.App.4th 1166, 1175–1176 [196 Cal.Rptr.3d 53].)

“ ‘When there is no material conflict in the extrinsic evidence, the trial court interprets the contract as a matter of law. [Citation.] This is true even when conflicting inferences may be drawn from the undisputed extrinsic evidence [citations] or that extrinsic evidence renders the contract terms susceptible to more than one reasonable interpretation. [Citations.] If, however, there is a conflict in the extrinsic evidence, the factual conflict is to be resolved by the jury. [Citations.]’ ” (Brown v. Goldstein (2019) 34 Cal.App.5th 418, 433 [246 Cal.Rptr.3d 161].)

“[I]t is indisputably the law that ‘when ambiguous terms in a memorandum are disputed, extrinsic evidence is admissible to resolve the uncertainty.’ The agreement must still provide the essential terms, and it is ‘clear that extrinsic evidence cannot supply those required terms.’ ‘It can, however, be used to explain essential terms that were understood by the parties but would otherwise be unintelligible to others.’ ” (Jacobs v. Locatelli (2017) 8 Cal.App.5th 317, 325 [213 Cal.Rptr.3d 514], original italics, internal citations omitted.)

Secondary Sources

1 Witkin, Summary of California Law (11th ed. 2017) Contracts, §§ 764–766
13 California Forms of Pleading and Practice, Ch. 140, Contracts, § 140.32 (Matthew Bender)
27 California Legal Forms, Ch. 75, Formation of Contracts and Standard Contractual Provisions, § 75.15 (Matthew Bender)
2 Matthew Bender Practice Guide: California Contract Litigation, Ch. 21, Asserting a Particular Construction of Contract, 21.04[2][b], 21.14[2]