In agreements the intention of the parties, rather than the words actually used, should be considered.

Explanation

When the words of a contract are ambiguous or conflict with the evident purpose, courts look to the circumstances, course of dealing, and mutual understanding at the time of agreement — invoke this maxim to defeat a party's attempt to exploit a technical misstatement against the other's known intent.

Where this applies

• The contract says one thing but both parties clearly intended something different.
• The actual words of the agreement don't match what we both agreed to verbally.
• Mutual intention of the parties should govern over the literal text of the contract.

See also

• 10.1.1 Liberal constructions of written instruments are to be made, on account of the simplicity of the common people, so that the thing may have effect rather than perish; and words should serve the intention, not the intention the words.
• 10.2.4 Words are indicators of the mind.