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Part VI Terms and Interpretation, 20 Interpretation of Written Contracts

From: Contract Law in Practice

Neil Andrews

Content type:
Book content
Product:
International Commercial Law [ICML]
Published in print:
27 May 2021
ISBN:
9780192897947

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved.date: 30 September 2023

Subject(s):
Construction of contract — Interpretation of contract

Commercially, this is the most important field of contractual law. In recent decades, English courts have declared that the task is to interpret written contracts (also known as ‘construction’) with sensitivity to shared purposes and aims. The courts have regard to the factual matrix within which the contract has arisen and to issues of business or commercial common sense. The courts will also read contractual wording without misplaced pedantry. Under the rubric of ‘constructive construction’, judges are prepared to rearrange text when it is clear that inapposite language has been used and it is also objectively obvious what the shared intention must have been. This process is illuminated by text, context, and (where there is genuine ambiguity) to commercial common sense, but not by deep reference to background party discussion or private opinion. Thus there are three evidential bars: the courts will not admit evidence of a party’s subjective intent or understanding; secondly, evidence of negotiations is inadmissible (but such evidence will be fundamental if a plea of rectification is made, on which chapter 21); thirdly, post-formation conduct is inadmissible (unless there has been a variation or estoppel by convention; on the latter [2.58]).

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