Conduct of the party is to be interpreted according to the intent of the party where that intent was fully understood by the other party
Reasonable person rule (if above rule not applicable)
Interpreted according to the understanding that a reasonable person (from the perspective of the person receiving the statement or seeing the conduct) would have understood
Supplemental rules
In determining intent of a party or the understanding a reasonable person would have had, due consideration to all relevant circumstances, including
[BUT: can have merger clause clause at end of contract that says this agreement governs and you can ignore all previous prior agreements and understandings not expressed therein