B. [§ 2.3] Definition and Interpretation of A Contract

• Jurisdiction: Maryland

B. [§ 2.3] Definition and Interpretation of a Contract

"A contract is an agreement that creates an obligation or a promise or set of promises for breach of which the law provides a remedy, or the performance of which the law recognizes as a duty." Gables Constr., Inc. v. Red Coats, Inc., 241 Md. App. 1, 31, 207 A.3d 1220, 1237 (2019), rev'd on other grounds, 468 Md. 632, 228 A.3d 736 (2020); see also Kiley v. First Nat'l Bank, 102 Md. App. 317, 333, 649 A.2d 1145, 1152 (1994) ("A contract is defined as 'a promise or set of promises for breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty.'"), cert. denied, 338 Md. 116, 656 A.2d 772, cert. denied, 516 U.S. 866 (1995); see also Lacy v. Arvin, 140 Md. App. 412, 780 A.2d 1180 (2001).

"Maryland follows the objective law of contract interpretation," and the "cardinal rule of contract interpretation is to give effect to the parties' intentions." Tomran, Inc. v. Passano, 391 Md. 1, 13-14, 891 A.2d 336, 344 (2006); see also Impac Mortg. Holdings, Inc. v. Timm, 474 Md. 495, 534, 255 A.3d 89, 112 (2021) ("[T]he first step in construing contract language under the 'objective' approach to contract interpretation is to review within the 'four corners' of the contract[.]"). For cases discussing the Maryland law of contract interpretation, with extensive citation to other cases, see Cochran v. Norkunas, 398 Md. 1, 16, 919 A.2d 700, 709 (2007); Towson Univ. v. Conte, 384 Md. 68, 78, 862 A.2d 941, 946 (2004); Atl. Contracting & Material Co. v. Ulico Cas. Co., 380 Md. 285, 301, 844 A.2d 460, 469 (2004); Anderson Adventures, LLC v. Sam & Murphy, Inc., 176 Md. App. 164, 178-79, 932 A.2d 1186, 1194-95 (2007); Middlebrook Tech, LLC v. Moore, 157 Md. App. 40, 65-67, 849 A.2d 63, 78-79 (2004); Owens-Illinois, Inc. v. Cook, 148 Md. App. 457, 813 A.2d 280 (2002), aff'd, 386 Md. 468, 478 n.8, 872 A.2d 969, 975 n.8 (2005). The Court of Appeals reiterated these principles in the context of insurance policies in Clendenin Bros., Inc. v. U.S. Fire Ins. Co., 390 Md. 449, 458-60, 889 A.2d 387, 393-94 (2006).

The objective standard means that the "true interpretation of an offer or acceptance is not what the party making it thought it meant or intended to mean, but what a reasonable person in the position of the parties would have thought it meant." Nat'l Fire Ins. Co. v. Tongue, Brooks & Co., 61 Md. App. 217, 225, 486 A.2d 212, 216 (1985). In 2021, the Court of Appeals discussed at...