This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
If the parties have used words which have an ordinary meaning free from ambiguity, and no technical meaning is shown, extrinsic evidence is inadmissible to show that the parties used such terms in a sense different from their ordinary meaning, as the only effect of such evidence would be to contradict the legal effect of the language which the parties themselves have used.1 Thus evidence is not admissible to show the meaning of "to be advertised till sold,"2 "f o. b.,"3 "delivered East St. Louis,"4 "wholesale prices,"5 or to mine ore at a certain price as long "as we can make it pay."6 Under a contract for drilling for gas or oil a provision to pay for "gas" can not be shown to mean only gas from a gas well and not gas from a well producing oil chiefly.7 So under a contract concerning "bales" of cotton, it was held that the parties could show what meaning "bales" had by usage, but that they could not show an oral contract between the parties fixing a weight for a "bale."8 So under a contract which refers to the "amount" of grading, it can not be shown that "amount" means cost and not quantity.9
11 American Bridge Co. v. Glenmore Distilleries Co. (Ky.) 107 S. W. 279, 32 Ky. Law Rep. 873; Way v. Greer, 196 Mass. 237, 14 L. R. A. (N.S.) 459, 81 N. E. 1002; Edwards v. Jefferson Standard Life Ins. Co., 173 N. Car, 614, 92 S. E. 695.
12 Berry v. Kowalsky, 95 Cal. 134, 29 Am. St. Rep. 101, 30 Pac. 202.
13 Harrison v. McCormick, 89 Cal. 327, 23 Am. St. Rep. 469, 26 Pac. 830.
14 American Bridge Co. v. Glenmore Distilleries Co. (Ky.), 107 S. W. 279, 32 Ky. Law Rep. 873.
15Way v. Greer, 196 Mass. 237, 14 L. R. A. (N.S.) 459, 81 N. E. 1002.
16 Crawford v. Northwestern Traveling Men's Association, 226 111. 57, 10 L. R. A. (N.S.) 264, 80 N. E. 736.
1 Arkansas. Warmack v. Perkins, 132 Ark. 378, 201 S. W. 120.
California. Hawley v. Kafitz, 148 Cal. 393, 3 L. R. A. (N.S.) 741, 83 Pac. 248; Burge v. Albany Nurseries, 176 Cal 313, 168 Pac. 343; Shean v. Weeks, 176 Cal. 592, 169 Pac. 231.
Connecticut. Adams v. Turner, 73 Conn. 38, 46 Atl. 247.
Georgia. George W. Muller Bank Fixture Co. v. Georgia Ry. & Electric Co., 145 Ga. 484, 89 S. E. 615.
Michigan. Chase v. Ainsworth, 135 Mich. 119, 97 N. W. 404.
Minnesota. Bell Lumber Co. v. Seaman, 136 Minn. 106, 161 N. W. 383.
Mississippi. Hickman Ebbert Co. v. Asa W. Allen Co., 111 Miss. 161, 71 So. 310.
Pennsylvania. Hartley Zeigler Co. v Bacon, 251 Pa. St. 87, 96 Atl. 257.
South Carolina. Kentucky Wagon Mfg. Co. v. People's Supply Co., 77 S. Car. 92, 122 Am. St. Rep. 540, 57 S. E. 676.
Vermont. Whittier v. Parmenter, 90 Vt. 16 [sub nomine, Whittier v. Mont-pelier Ice Co., 96 Atl. 378].
Washington. Thomson & Stacy Co. v. Evans, 100 Wash. 277, 170 Pac. 578.
Wisconsin. Vogt v. Schienebeck, 122 Wis. 491, 106 Am. St. Rep. 989, 67 L. R. A. 756, 100 N. W. 820.
If, on the other hand, the term used is one which has two or more meanings, evidence of the intention of the parties direct is admissible to show in which sense it was used.10 So if a written receipt refers to a "due bill," evidence is admissible to show that by such expression the parties intended a certain promissory note.11 If a letter which encloses bills of lading to a bank instructs the bank to "hold same in trust for us," extrinsic evidence is admissible to show the terms of the trust and the beneficiaries thereunder.12 So the meaning which the parties give to "outstanding accounts" may be shown.18 So if the term "perch" is shown to have two meanings when used as a measure of stone, the direct intention of the parties may be considered in ascertaining which meaning of the term was intended.14 The word "cord" as a measure of wood is so ambiguous that oral evidence may be introduced to show the meaning which the parties attached thereto and their real intention.11 So under a contract providing for "wholesale factory prices," it was held proper to show that the parties intended a scale differing from actual wholesale prices.13 A contract entered 4nto in Porto Rico before its annexation to the United States for the payment of money, does not contemplate such annexation, and the provision for payment of money is not to be construed literally, but such payment is to be made in United States money at the rate of exchange fixed by Congress.17 Although a contract provides that work is to be done "in accordance with plans and specifications to be furnished," it may be shown that such plans and specifications were prepared and were attached to the contract when it was executed.18 Extrinsic evidence is admissible to show the meaning of the term "manufacturing, handling, or shipping" stock of a factory for manufacturing lumber.19 Under a contract for paying a commission upon sales made at a "profit," the term profit does not possess a rigid meaning and extrinsic evidence is admissible to show its meaning.20 A contract for compensating a farm laborer by giving him a share of "the increase of live stock" at a certain "profit," may be explained by showing the meaning of such terms.21 The term "car" as a measure of weight may be shown to mean a certain number of pounds.22 Under a contract by which money paid for stock in a corporation was to be repaid if the corporation did not establish a "store," the term "store" is so indefinite that it may be explained by evidence of the parties direct.23 A contract which warrants the operation of a machine in a mine under normal conditions, may be shown by extrinsic evidence to refer to normal conditions in the mine and not to normal conditions outside of the mine.24 If a contract for the sale of land provides that the vendor is to "clear" a certain area thereof, extrinsic evidence is admissible to show the surrounding circumstances so that the court can ascertain the meaning of the term "clear."25 Under a contract to drill a well so as to "procure water," evidence of the surrounding circumstances and of the conversation of the parties is admissible to show that drinking water and not salt water was intended.26 If a contract to furnish cuts describes them as "Outcault Service De Luxe" cuts, extrinsic evidence is admissible to show the meaning given to such expression by the seller to the purchaser.27 If a provision that a debt shall bear interest from "maturity date" is ambiguous, extrinsic evidence is admissible to show what date is intended.28