of contract interpretation.55) In a departure from its generally subjectivist perspective, the Restatement (Second) says,

[a standardized agreement] is interpreted wherever reasonable as treating alike all those similarly situated, without regard to their knowledge or understanding of the standard terms of the writing.56

This provision strips the parties’ mental intentions from the interpretation of a standardized contract. It indicates that a court should give the words in such a contract their legal meanings in the precedents when the precedents involve the same words in a similar standardized agreement between similarly situated parties.

In a very abstract way, legal meanings are a part of the objective context within which the parties contract. They often are too remote from the parties’ minds, however, to shed light on their subjective intentions. It also should be asked whether they are too remote to be part of the context in which the parties used the words, as when a reasonable person in the parties’ shoes would be unaware of the legal meaning and have no reason to be aware of it. When too remote, a legal meaning of a word is outside the contract’s context and the scope of objective interpretation.

§ 2.2.7. Practical Construction (Course of Performance)

A practical construction, which the UCC calls a course of performance,57 concerns the parties’ conduct after a contract was formed and before a dispute arises. It usually involves conduct in the performance of the contract. To count as a practical construction, one party must engage in repeated conduct over a considerable period of time, and the other party must accept or acquiesce in it with knowledge of the conduct and an opportunity to object to it.58 For example, in Coliseum Towers Associates v. County of Nassau,59 a lease was unclear as to whether the landlord or the tenant was obligated to pay the real property taxes. The tenant, not under protest and without objection by the landlord, paid the taxes for seven years. The court

55Rory v. Continental Ins. Co., 703 N.W.2d 23, 41 (Mich. 2005).

56RESTATEMENT (SECOND) OF CONTRACTS § 211(2) (1981).

57UCC § 303(1) (2001).

58Id.; Coliseum Towers Assoc. v. County of Nassau, 769 N.Y.S.2d 293, 296 (App.Div. 2003); Georgiades v. Glickman, 75 N.W.2d 573, 576–77 (Wis. 1956).

59Coliseum Towers Assoc. 769 N.Y.S.2s at 296.