Although it must be admitted that the meaning of language is a factual question, the general rule is that interpretation of a document is a question of law rather than of fact. If an issue of contract interpretation concerns the intention of parties, that intention may be determined from the written contract, as a matter of law, when the nature of the transaction lends itself to judicial interpretation.
Subcontractors entered into an agreement with a contractor to do work on a construction project. After subcontractors completed the work, contractor refused to make final payment contending that it had not received final payment from the owner. Subcontractors initiated a breach of contract action and were granted summary judgment by the trial court. The contractor contended the parties' agreement provided that the owner's payment was a condition precedent to it's duty to perform.
Was owner's payment to contractor a condition precedent in the contract?
The court affirmed the decision because the payment by the owner was not a condition precedent to petitioner's duty to pay respondents. The parties' agreement was ambiguous regarding the payment provision, so that such ambiguity was resolved in respondents' favor. Respondents were small subcontractors who would usually not assume the risk that the owner would not pay petitioner. If the parties wanted to shift the burden of risk from petitioner to respondents, the parties' agreement could have provided such provision.