The first step of the contract interpretation process is to read the actual words of the contract. Contract interpretation begins with the so-called “four corners” of the contract, and the plain language of the agreement can provide the best insight into what the contract is all about. There are many ways to interpret the contract by focusing on the words themselves. They must be defined first by their dictionary definition. After that, the words should be defined using the meaning of the terms in whatever industry the contract is in. Words generally mean their dictionary definition, but there could be an instance where words would have a different meaning because they are in a specific industry where they is industry language that should be understood and interpreted.

The next step is to look to the conduct of the parties. If there is ambiguity in the contract, then one must look at how the parties have operated in the past to understand what their contract means. This might not always be possible. Not every contract is between parties that have a history of working together. In this case, it is best to look at the industry standards to better understand the contract and properly interpret its terms.

One of the benefits of this kind process of contract interpretation is that it gives preference to the words on the page and to what the parties must have intended with their words. The courts will usually take the four corners of the contract and give the plain meaning of the words in the contract preference over everything else. For instance, if the contract requires that a writer deliver a “rough draft” to another party first, then one can use both the dictionary definition of rough draft to understand the obligation and the industry meaning of rough draft, depending on what industry the contract is written in.

Another potential step for the interpretation process would be reviewing industry standards first so that the language would be easier to break down. Most contracts include at least some jargon that helps to guide the agreement between the two parties. Reviewing the industry standards will allow one avoid misunderstandings of common terms.

One of the ways this process enhances the government contracting process is by ensuring that things are better understood. The basic goal when entering into contracts is to ensure that both sides understand the obligations they are signing up for. Without an understanding, there is a chance that parties will have to engage in expensive litigation to fix the issue, and there is a chance that the relationship between the two parties will be so fractured that they will not have the ability to successfully do business in the future. Because the government contracting process can be confusing at times, starting with the plain reading of the four corners of the contract is a good way to understand what is required of the two parties. For instance, if there is some misunderstanding about when one party is required to deliver a product or service under the government’s requirement, then the right place to start is by simply reading the words in the government’s official contract. After that, if there is ambiguity about this time frame, a person could attempt to use other means to break the confusion.

One thing that could improve the process for government contracting purposes is having an interpreting party review other government contracts first to get a sense of some of the rules the government is constrained by. The government is constrained by certain rules about when and how they must pay their contracting parties. Understanding these rules can help one know why a certain term might be included in the contract.