AMI 2415 Contract Interpretation—Course of Performance

This instruction should be given only if the court has determined that the contract contains ambiguous language and that the meaning of the ambiguous language depends upon disputed extrinsic evidence.

If the contract is governed by Article 2 of the Uniform Commercial Code, use AMI 2511.

An uncertain agreement may be supplemented by subsequent acts, agreements, or declarations of the parties as to make it certain and valid. Foundation Telecommunications, Inc. v. Moe Studio, Inc., 341 Ark. 231, 242, 16 S.W.3d 531, 538 (2000) (holding that the parties had entered into a binding contract). The objection of indefiniteness may be obviated by performance and acceptance of performance. Id.

Where a contract is ambiguous, the court will accord considerable weight to the construction the parties themselves give to it, evidenced by subsequent statements, acts, and conduct. RAD-Razorback Ltd. Partnership v. B.G. Coney Co., 289 Ark. 550, 555, 713 S.W.2d 462, 466 (1986). See Welch v. Cooper, 11 Ark. App. 263, 268, 670 S.W.2d 454, 458 (advising that the court looks to the conduct of the parties to determine what they intended when a term is indefinite).

Intention of the parties must be ascertained from the whole context of an agreement or deed and not from particular words and phrases. Wynn v. Sklar & Phillips Oil Co., 354 Ark. 332, 341, 493 S.W.2d 439, 444 (1973). Courts may also acquaint themselves with and consider circumstances existing at the time of the execution of a contract and the situation of the parties who made it. Id. See Northwest Nat. Bank v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 25 Ark. App. 279, 283, 757 S.W.2d 182, 184 (1988) (noting that assignments are generally interpreted or construed under the rules governing construction of contracts, with primary object always being to ascertain and carry out the intention of the parties).