law-contract-unambiguous | contract construction | ambiguous contracts | parol evidence rule |
when may extrinsic evidence be considered?
INTERPRETATION AND ENFORCEMENT OF UNAMBIGUOUS CONTRACT
The interpretation of an unambiguous contract is a question of law for the court to decide. N.M. Uranium, Inc. v.
Moser, 587 S.W.2d 809, 814 (Tex.Civ. App.-Corpus Christi 1979, writ ref'd n.r.e.); see also Perry v. Houston
Indep. Sch. Dist., 902 S.W.2d 544, 547 (Tex.App.-Houston [1st Dist.] 1995, writ dism'd w.o.j.).
Unambiguous contracts are enforced as written. See, e.g., Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118,
121 (Tex. 1996). When a contract contains an ambiguity, the granting of a motion for summary judgment is
improper because the interpretation of the instrument is a question of fact for the jury. Reilly v. Rangers Mgmt.,
Inc., 727 S.W.2d 527, 529 (Tex. 1987). Whether a contract is ambiguous is a question of law. See Nat'l Union
Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex.1995) (per curiam); see also Vermillion Constr. Co.
v. Fid. & Deposit Co., 526 S.W.2d 744, 748 (Tex.Civ.App.-Corpus Christi 1975, no writ). If a written contract is
worded so that it can be given a definite or certain legal meaning, then it is unambiguous. Nat'l Union, 907 S.W.
2d at 520; see also Coker v. Coker, 650 S.W.2d 391, 393 (Tex.1983); Universal CIT Credit Corp. v. Daniel, 150
Tex. 513, 243 S.W.2d 154, 157 (1951). An ambiguity does not arise simply because the parties offer conflicting
interpretations. Lopez v. Munoz, Hockema & Reed, 22 S.W.3d 857, 861 (Tex. 2000); Kelley-Coppedge, Inc. v.
Highlands, 980 S.W.2d 462, 465 (Tex.1998). Rather, a contract is ambiguous only if two or more meanings are
genuinely possible after application of the pertinent rules of interpretation to the face of the instrument. Daniel,
243 S.W.2d at 157. Parol evidence is not admissible for the purpose of creating an ambiguity. Highlands, 980 S.
W.2d at 464. Only when a contract is first determined to be ambiguous may the court admit extraneous
evidence to determine the true meaning of the instrument. Id.
When a written contract is not ambiguous, the trial court should interpret the contract as
a question of law. MCI Telecomms. Corp. v. Tex. Utils. Elec. Co., 995 S.W.2d 647, 650–51 (Tex. 1999).
Interpretation of an unambiguous contract is an issue of law. E.g., SAS Institute, Inc. v. Breitenfeld, 167 S.W.3d
840, 841 (Tex. 2005). However, when a contract is ambiguous, extrinsic evidence may be used to determine
the intent of the parties. E.g., Progressive County Mut. Ins. Co. v. Kelley, 284 S.W.3d 805, 807–08 (Tex. 2009)
(considering extrinsic evidence in interpreting an insurance agreement due to a latent ambiguity as to the intent
of the parties).
The determination of whether a contract is ambiguous is a question of law for
the court to decide by examining the contract as a whole in light of the circumstances
present when the contract was entered. Universal Health Servs. v. Renaissance
Womens Group, 121 S.W.3d 742, 746 (Tex. 2003). If contract language can be given
a certain or definite meaning, then it is not ambiguous and should be interpreted by
the court as a matter of law. DeWitt County Elec. Coop. v. Parks, 1 S.W.3d 96, 100
(Tex. 1999). On the other hand, a contract is ambiguous when it is susceptible to
more than one reasonable interpretation. Frost Nat'l Bank v. L & F Distribs., 165
S.W.3d 310, 312 (Tex. 2005). Lack of clarity does not create an ambiguity, and “not
every difference in the interpretation of a contract . . . amounts to ambiguity.”
Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 134 (Tex. 1994). “Whether a contract
is ambiguous is a question of law, subject to de novo review.” Bowden v. Phillips
Petroleum Co., 247 S.W.3d 690, 705 (Tex. 2008). A court should construe an
unambiguous contract according to the plain meaning of its express wording. Lyons
v. Montgomery, 701 S.W.2d 641, 643 (Tex. 1985).
In re Aramco Services Co (Tex.App.- Houston [1st Dist.] Mar. 19, 2010)(Sharp)
(arbitration mandamus) (choice of law and forum and language for arbitration and notices)
GRANT PETITION FOR WRIT OF MANDAMUS: Opinion by Justice Sharp
Before Justices Keyes, Sharp and Massengale
01-09-00624-CV In re Aramco Services Company
Appeal from 334th District Court of Harris County
Trial Court Judge: Hon Sharon McCally
In light of our conclusion that the trial court could not be the “Authority”
empowered to appoint arbitrators pursuant to the parties’ agreement, we do not reach
the question concerning the empanelment of non-Muslim arbitrators.
CONTRACT CONSTRUCTION - UNAMBIGUOUS CONTRACT
Our primary concern in construing a written contract is to ascertain the true intent of the parties as expressed in
the instrument. Seagull Energy E & P, Inc. v. Eland Energy, Inc., 207 S.W.3d 342, 345 (Tex. 2006); Valence
Operating Co. v. Dorsett, 164 S.W.3d 656, 662 (Tex. 2005). Usually, the intent of the parties can be discerned
from the instrument itself. ExxonMobil Corp. v. Valence Operating Co., 174 S.W.3d 303, 312 (Tex. App.--
Houston [1st Dist.] 2005, pet. denied). When an issue regarding the construction of a contract is presented, we
must examine and consider the entire writing in an effort to harmonize and to give effect to all the provisions of
the contract so that none will be rendered meaningless. Seagull Energy E & P, Inc., 207 S.W.3d at 345.
Contract terms will be given their plain, ordinary, and generally accepted meanings unless the contract itself
shows them to be used in a technical or different sense. Valence Operating Co., 164 S.W.3d at 662. A contract
is ambiguous only if its meaning is uncertain or if it is subject to two or more reasonable interpretations.
ERG Resources LLC v. Merlon Texas, Inc. (Tex.App.- Houston [1st Dist.] Oct. 29, 2009)(Jennings)
(oil gas and minerals law, no breach of contract for sale, no conversion claim if no longer owned by plaintiff)
AFFIRM TC JUDGMENT: Opinion by Justice Terry Jennings
Before Justices Jennings, Higley and Sharp
01-08-01007-CV ERG Resources. LLC v. Merlon Texas, Inc.
Appeal from 333rd District Court of Harris County
Trial Court Judge: The Honorable Joseph J. Halbach
Seagull Energy E & P, Inc., 207 S.W.3d at 345; Edascio, L.L.C. v. NextiraOne L.L.C., 264 S.W.3d 786, 796-97
(Tex. App.--Houston [1st Dist.] 2008, pet. denied). If a written contract is worded in such a way that it can be
given a definite or certain legal meaning, then the contract is not ambiguous. SAS Inst., Inc. v. Breitenfeld, 167
S.W.3d 840, 841 (Tex. 2005). An ambiguity does not arise simply because the parties advance conflicting
interpretations of the contract. Tex. Farm Bureau Mut. Ins. Co. v. Sturrock, 146 S.W.3d 123, 126 (Tex. 2004).
When the parties have entered into an unambiguous contract, the courts will enforce the intention of the parties
as written in the instrument. Sun Oil Co. (Delaware) v. Madeley, 626 S.W.2d 726, 731 (Tex. 1981).
The essential elements of a breach of contract action are: (1) the existence of a valid contract; (2) performance
or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages
sustained by the plaintiff as a result of the breach. Hussong v. Schwan’s Sales Enters., Inc., 896 S.W.2d 320,
326 (Tex. App.—Houston [1st Dist.] 1995, no writ).
Summary judgment is appropriate in cases involving the interpretation of an unambiguous document. See
Coker v. Coker, 650 S.W.2d 391, 393-94 (Tex. 1983); Bishop v. National Loan Investors, L.P., 915 S.W.2d 241,
245 (Tex. App.—Fort Worth 1995, writ denied); Bass v. Shell, 957 S.W.2d 159, 160 (Tex. App.—San Antonio
1997, no pet.). When a contract is unambiguous we will enforce it as written. Lopez v. Munoz, Hockema & Reed,
L.L.P., 22 S.W.3d 857, 862 (Tex. 2000). It is a basic rule of contract law that a court called upon to interpret a
contract will give plain meaning to the words used in the writing. See City of Pinehurst v. Spooner Addition
Water Co., 432 S.W.2d 515, 518-19 (Tex. 1968). Our primary concern in construing a written contract is to
ascertain the true intent of the parties as expressed in the instrument. Forbau v. Aetna Life Ins. Co., 876 S.W.
2d 132, 133 (Tex. 1994); Coker, 650 S.W.2d at 393.
In interpreting a written contract to ascertain the parties’ intent, we must examine and consider the entire
writing in an effort to harmonize and give effect to all provisions of the contract so that none will be
rendered meaningless. Coker, 650 S.W.2d at 393; Universal C.I.T. Credit Corp. v. Daniel, 243 S.W.2d 154, 158
(Tex. 1951). Thus, no single provision taken alone will be given controlling effect, and all provisions must be
considered with reference to the whole instrument. Coker, 650 S.W.2d at 393; Myers v. Gulf Coast Minerals
Mgmt. Corp., 361 S.W.2d 193, 196 (Tex. 1962). 01-03-00272-CV
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