Section 98 The Indian Contract Act, 1872
Section 98 of the Indian Contract Act, 1872 states:
"Construction of ambiguous words. —Where the words of a promise are ambiguous, and admit of two meanings, the promise shall be interpreted in the sense in which the promisor understood it."
Explanation:
This section deals with interpretation of ambiguous terms in a contract. If the language of a promise is ambiguous (i.e., open to more than one interpretation), then it should be interpreted in the sense that the promisor understood it at the time the contract was made.
Key Points:
Ambiguity: Arises when a word or phrase has more than one meaning.
Promisor’s understanding prevails: The meaning that the promisor attributed to the words will be taken as the correct interpretation, if the promisee knew or had reason to believe that meaning.
Illustration:
If A promises to deliver "cherries" to B, and in the local trade practice, "cherries" means both fresh and canned cherries — but A meant fresh cherries and B also understood that — then the contract will be construed as relating to fresh cherries, not canned.
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