Legal Definitions - contemporaneous construction

Contemporaneous Construction

Contemporaneous construction refers to a method of interpreting a legal document, such as a contract, statute, or organizational bylaws, by examining how the parties involved or the relevant authorities understood and applied it at the time it was created or came into effect. This approach assumes that the best evidence of the original intent or meaning of a document can often be found in the actions, practices, or interpretations that occurred concurrently with its formation or initial implementation.

• Example 1: Software Development Contract

  A software development company (DevCo) and a client (ClientCorp) sign a contract for a new application. The contract includes a clause about "intellectual property rights" for custom modules, but it's not perfectly clear who owns the underlying algorithms developed during the project. For the first six months after signing, DevCo consistently provides ClientCorp with full source code access, including the algorithms, and ClientCorp uses them freely in other projects without any objection from DevCo.

  This consistent behavior by both parties at the time the contract was being implemented demonstrates their contemporaneous construction of the ambiguous intellectual property clause, suggesting they understood ClientCorp to have broad rights to the algorithms from the outset.

• Example 2: Environmental Regulation

  In 1980, a state legislature passes a new law regulating "hazardous waste disposal sites." The state's Environmental Protection Agency (EPA), responsible for implementing the law, immediately publishes detailed regulations and guidelines that specifically exclude certain types of low-level industrial byproduct facilities from the definition of "disposal sites" for the first five years. Years later, a new administration attempts to apply the law more broadly to include these previously excluded facilities.

  The initial interpretation and consistent enforcement practice by the state EPA during the period immediately following the law's enactment and initial implementation provides strong evidence of the contemporaneous construction of the term "hazardous waste disposal sites" by the very agency tasked with its application.

• Example 3: Non-Profit Bylaws

  A newly formed non-profit organization drafts its bylaws in 2005. One clause states that "major financial decisions" require a two-thirds vote of the board, but it doesn't explicitly define what constitutes a "major financial decision." For the first five years of the organization's existence, the board consistently treated any expenditure over $10,000 as a "major financial decision" requiring a two-thirds vote, while expenditures below that amount only needed a simple majority.

  The consistent practice of the board of directors during the initial period after the bylaws were adopted demonstrates their contemporaneous construction of the ambiguous phrase "major financial decisions," providing insight into what they originally intended that term to mean.