Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 12 (1995)

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Cite as: 514 U. S. 52 (1995)

Opinion of the Court

(1984); 9 Restatement (Second) of Contracts 206; United States v. Seckinger, 397 U. S. 203, 210 (1970). Respondents drafted an ambiguous document, and they cannot now claim the benefit of the doubt. The reason for this rule is to protect the party who did not choose the language from an unintended or unfair result.10 That rationale is well suited to the facts of this case. As a practical matter, it seems unlikely that petitioners were actually aware of New York's bifurcated approach to punitive damages, or that they had any idea that by signing a standard-form agreement to arbitrate disputes they might be giving up an important substantive right. In the face of such doubt, we are unwilling to impute this intent to petitioners.

Finally respondents' reading of the two clauses violates another cardinal principle of contract construction: that a document should be read to give effect to all its provisions and to render them consistent with each other. See, e. g., In re Halas, 104 Ill. 2d 83, 92, 470 N. E. 2d 960, 964 (1984); Crimmins Contracting Co. v. City of New York, 74 N. Y. 2d 166, 172-173, 542 N. E. 2d 1097, 1100 (1989); Trump-Equitable Fifth Avenue Co. v. H. R. H. Constr. Corp., 106 App. Div. 2d 242, 244, 485 N. Y. S. 2d 65, 67 (1985); Restatement (Second) of Contracts 203(a) and Comment b; id., 202(5). We think the best way to harmonize the choice-of-9 We cite precedent from Illinois, the forum State and place where the contract was executed, and New York, the State designated in the contract's choice-of-law clause. The parties suggest no other State's law as arguably relevant to this controversy.

10 The drafters of the Second Restatement justified the rule as follows: "Where one party chooses the terms of a contract, he is likely to provide more carefully for the protection of his own interests than for those of the other party. He is also more likely than the other party to have reason to know of uncertainties of meaning. Indeed, he may leave meaning deliberately obscure, intending to decide at a later date what meaning to assert. In cases of doubt, therefore, so long as other factors are not decisive, there is substantial reason for preferring the meaning of the other party." Restatement (Second) of Contracts 206, Comment a (1979).


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