Final answer:
Courts will look to the intention of a contractual condition when language is ambiguous or a literal interpretation leads to an absurdity. They seek to understand the parties' intent at the time of contract formation considering various relevant factors.
Step-by-step explanation:
When interpreting contracts, courts often look to the intention of a contractual condition in cases where the language is ambiguous, or where the literal interpretation would result in an absurdity that does not make sense from a business standpoint. The court seeks to understand what the parties intended at the time the contract was formed. This intent is ascertained from the contract itself, considering its wording and structure, the factual backdrop against which the contract was entered into, and, sometimes, pre-contractual negotiations. A well-known principle in contract law is that, when a dispute arises, a judge may consider the rhetorical strategies employed by both sides to argue their interpretation of the contractual terms.