Crucial Exams

Multistate Bar Examination Practice Question

A software company enters into a contract with a developer, agreeing to pay the developer a bonus for 'significant progress' on a custom application. However, the contract does not define the term 'significant progress.' A dispute arises when the developer claims to have met the requirement for the bonus, but the company disagrees. What is the most appropriate way for the court to interpret the term 'significant progress'?

  • The court will instruct the parties to renegotiate the ambiguous term since it is undefined.

  • The court will enforce its own understanding of the term without considering external evidence to avoid adding terms to the contract.

  • The court will interpret the term by considering evidence of the parties' intent, such as prior negotiations and industry standards.

  • The court will prioritize the developer's interpretation of the term since it is more favorable to them as the performing party.

Multistate Bar Examination
Contracts
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