Aditi Bagchi, ‘Risk Averse Contract Interpretation’

ABSTRACT
Boilerplate reveals the inadequacies of a certain stylized approach to contract interpretation. This essay argues, however, that boilerplate does not require its own, conceptually unique interpretive apparatus. The methods we use to read boilerplate can be derived from principles that inform contract interpretation in general. We can treat it ‘normally’ for two reasons. First, contract interpretation should always take into account factors that scholars deem especially important in the context of boilerplate. If we understand contract interpretation always to incorporate external references of reasonable meaning, boilerplate does not require its own interpretive regime. More specifically, boilerplate only functions if we take into account the standard market terms that it ordinarily accompanies. But courts should always take standard market terms into account as a benchmark for interpreting ambiguous contract language. Properly applied, an externally-sensitive methodology accounts for third-party effects of boilerplate interpretation without requiring a specialized procedure …

Bagchi, Aditi, Risk Averse Contract Interpretation (May 8, 2020). Law and Contemporary Problems, volume 82, no 4, 2019.

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