CACI No. 314. Interpretation - Disputed Words

Judicial Council of California Civil Jury Instructions (2024 edition)

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314.Interpretation - Disputed Words
[Name of plaintiff] and [name of defendant] dispute the meaning of the
following words in their contract: [insert disputed language].
[Name of plaintiff] claims that the words mean [insert plaintiff’s
interpretation]. [Name of defendant] claims that the words mean [insert
defendant’s interpretation]. [Name of plaintiff] must prove that [his/her/
nonbinary pronoun/its] interpretation is correct.
In deciding what the words of a contract mean, you must decide what
the parties intended at the time the contract was created. You may
consider the usual and ordinary meaning of the language used in the
contract as well as the circumstances surrounding the making of the
[The following instructions may also help you interpret the words of the
New September 2003; Revised December 2014
Directions for Use
Give this instruction if there is conflicting extrinsic evidence as to what the parties
intended the language of their contract to mean. While interpretation of a contract
can be a matter of law for the court (Parsons v. Bristol Development Co. (1965) 62
Cal.2d 861, 865 [44 Cal.Rptr. 767, 402 P.2d 839]), it is a question of fact for the
jury if ascertaining the intent of the parties at the time the contract was executed
depends on the credibility of extrinsic evidence. (City of Hope National Medical
Center v. Genentech, Inc. (2008) 43 Cal.4th 375, 395 [75 Cal.Rptr.3d 333, 181 P.3d
Read any of the instructions (as appropriate) on tools for interpretation (CACI
Nos. 315 through 320) after reading the last bracketed sentence.
Sources and Authority
Contract Interpretation: Intent. Civil Code section 1636.
Contracts Explained by Circumstances. Civil Code section 1647.
“Juries are not prohibited from interpreting contracts. Interpretation of a written
instrument becomes solely a judicial function only when it is based on the words
of the instrument alone, when there is no conflict in the extrinsic evidence, or a
determination was made based on incompetent evidence. But when, as here,
ascertaining the intent of the parties at the time the contract was executed
depends on the credibility of extrinsic evidence, that credibility determination
and the interpretation of the contract are questions of fact that may properly be
resolved by the jury.” (City of Hope National Medical Center,supra, 43 Cal.4th
at p. 395, footnote and internal citations omitted.)
“This rule - that the jury may interpret an agreement when construction turns on
the credibility of extrinsic evidence - is well established in our case law.
California’s jury instructions reflect this (Judicial Council of Cal. Civ. Jury
Instns. (2008) CACI No. 314) . . . , as do authoritative secondary sources.”
(City of Hope National Medical Center,supra, 43 Cal.4th at pp. 395−396,
internal citations omitted.)
“The trial court’s determination of whether an ambiguity exists is a question of
law, subject to independent review on appeal. The trial court’s resolution of an
ambiguity is also a question of law if no parol evidence is admitted or if the
parol evidence is not in conflict. However, where the parol evidence is in
conflict, the trial court’s resolution of that conflict is a question of fact and must
be upheld if supported by substantial evidence. Furthermore, ‘[w]hen two
equally plausible interpretations of the language of a contract may be made . . .
parol evidence is admissible to aid in interpreting the agreement, thereby
presenting a question of fact which precludes summary judgment if the evidence
is contradictory.’ (WYDA Associates v. Merner (1996) 42 Cal.App.4th 1702,
1710 [50 Cal.Rptr.2d 323].)
“In interpreting a contract, the objective intent, as evidenced by the words of the
contract is controlling. We interpret the intent and scope of the agreement by
focusing on the usual and ordinary meaning of the language used and the
circumstances under which the agreement was made.” (Lloyd’s Underwriters v.
Craig & Rush, Inc. (1994) 26 Cal.App.4th 1194, 1197-1198 [32 Cal.Rptr.2d
144], internal citations omitted.)
“Ordinarily, even in an integrated contract, extrinsic evidence can be admitted to
explain the meaning of the contractual language at issue, although it cannot be
used to contradict it or offer an inconsistent meaning. The language, in such a
case, must be “reasonably susceptible” to the proposed meaning.” (Hot Rods,
LLC v. Northrop Grumman Systems Corp. (2015) 242 Cal.App.4th 1166,
1175-1176 [196 Cal.Rptr.3d 53].)
‘When there is no material conflict in the extrinsic evidence, the trial court
interprets the contract as a matter of law. [Citation.] This is true even when
conflicting inferences may be drawn from the undisputed extrinsic evidence
[citations] or that extrinsic evidence renders the contract terms susceptible to
more than one reasonable interpretation. [Citations.] If, however, there is a
conflict in the extrinsic evidence, the factual conflict is to be resolved by the
jury. [Citations.]’ (Brown v. Goldstein (2019) 34 Cal.App.5th 418, 433 [246
Cal.Rptr.3d 161].)
“[I]t is indisputably the law that ‘when ambiguous terms in a memorandum are
disputed, extrinsic evidence is admissible to resolve the uncertainty.’ The
agreement must still provide the essential terms, and it is ‘clear that extrinsic
evidence cannot supply those required terms.’ ‘It can, however, be used to
explain essential terms that were understood by the parties but would otherwise
be unintelligible to others.’ (Jacobs v. Locatelli (2017) 8 Cal.App.5th 317, 325
[213 Cal.Rptr.3d 514], original italics, internal citations omitted.)
Secondary Sources
1 Witkin, Summary of California Law (11th ed. 2017) Contracts, §§ 764-766
13 California Forms of Pleading and Practice, Ch. 140, Contracts, § 140.32
(Matthew Bender)
27 California Legal Forms, Ch. 75, Formation of Contracts and Standard
Contractual Provisions, § 75.15 (Matthew Bender)
2 Matthew Bender Practice Guide: California Contract Litigation, Ch. 21, Asserting
a Particular Construction of Contract, 21.04[2][b], 21.14[2]

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