When two parties are involved in a misunderstanding as to the meaning of a term of the contract,which of the following is usually applied by the court to settle the matter?
A)The court will find that there is no contract because there is no meeting of the minds.
B)non est factum
C)the most reasonable interpretation of the terms
D)the equitable remedy of rectification
E)caveat emptor

Question

Quizplus · Accepted Answer

When parties have a misunderstanding about a term of a contract, the court will usually apply the most reasonable interpretation of the terms to settle the matter. This means that the court will look at the language used in the contract, any industry or trade standards, and the intentions of the parties to determine what the disputed term means. The other options are not applicable in this situation: A) there may still be a contract even if there is a misunderstanding about a term, as long as the essential elements of a contract are present; B) non est factum is a defense that applies when a party signed a document without understanding its nature or contents, but not when there is a misunderstanding of a term; D) rectification is a remedy that allows a court to change the terms of a contract to reflect the actual agreement between the parties, but it requires clear and convincing evidence of a mistake or fraud, which may not be present in a simple misunderstanding; E) caveat emptor is a principle that applies to buyers, warning them to beware of hidden defects or risks in a transaction, but it does not help to interpret a term in a contract.

When Two Parties Are Involved in a Misunderstanding as to the Meaning