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AMI 2420 Contract Interpretation—Contract Composed of More Than One Document

Arkansas Supreme Court Committee On Jury Instructions-Civil

Ark. Model Jury Instr., Civil AMI 2420
Arkansas Model Jury Instructions-Civil
November 2021 Update
Arkansas Supreme Court Committee On Jury Instructions-Civil
Chapter 24. Contracts
Contract Interpretation
AMI 2420 Contract Interpretation—Contract Composed of More Than One Document
If the parties' contract is contained in more than one document, all of the documents must be considered together. The different clauses of the documents that make up the contract must be read together and, if possible, interpreted so that all of their parts are consistent with each other. An interpretation that fails to give effect to any provision of a contract cannot be adopted if the contract can be interpreted in a way that gives effect to all of its provisions.
If the contract is contained in one document, AMI 2419 should be given instead of this instruction.
“In seeking to harmonize different clauses of a contract, we should not give effect to one to the exclusion of another even though they seem conflicting or contradictory, nor adopt an interpretation which neutralizes a provision if the various clauses can be reconciled. The object is to ascertain the intention of the parties, not from particular words or phrases, but from the entire context of the agreement.” RAD-Razorback Ltd. Partnership v. B.G. Coney Co., 289 Ark. 550, 554, 713 S.W.2d 462, 465 (1986). In that case, the court harmonized separate sections of a single contract to determine the intention of the parties. Similarly, in Fryer v. Boyett, 64 Ark. App. 7, 11, 978 S.W.2d 304, 306 (1998), the court found that even though two contracts were subject to differing constructions, the trial court's interpretation was affirmed based upon the rule of construction that “[d]ifferent clauses of a contract must be read together and the contract construed so that all of its parts harmonize, if that is at all possible.”
“When two instruments are executed contemporaneously, by the same two parties in the course of the same transaction, they should be considered as one contract for purposes of interpretation, in the absence of a contrary intention.” Stokes v. Roberts, 289 Ark. 319, 322–23; 711 S.W.2d 757, 759 (1986); Universal Sec. Ins. Co. v. Ring, 298 Ark. 582, 586–87; 769 S.W.2d 750, 752–53 (1989). In Stokes, the court applied this rule of construction after finding that two separate contracts were intended as one and that the parties would not have agreed to one contract without the other.
A separate document that is incorporated by reference into the contract becomes a single agreement between the parties and must be construed together. In order to be incorporated by reference so that it becomes one contract, the reference must be clear and unequivocal and the terms of the incorporated document must be known or easily available to the contracting parties. Ingersoll-Rand Co. v. El Dorado Chem. Co., 373 Ark. 226, 283 S.W.3rd 191 (2008).
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