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- Preliminary Material
- Main Text
- Part I The General Part
- 1 Principles and Policies
- Preliminary Material
- Introduction
- Interpretation, Implication, and Rectification
- The Evolution of the Principles of Construction
- 1.33
- Statutory construction: a comparison
- The ‘literalist’ school and the ‘purposive’ school
- The traditional approach to construction
- The traditional approach encapsulated
- The shift to the modern approach to construction
- The Investors Compensation Scheme restatement
- The modern approach to construction encapsulated
- Principles and Policies
- Canons of construction
- Common law and equity
- Principles of construction, not rules
- Standard form contracts
- Standard forms versus bespoke alterations
- The principles of construction are universal
- The role of reasonableness (or unreasonableness)
- The role of good faith and fair dealing
- The intentions of the parties and the objective approach
- ‘Natural and ordinary meaning’
- The importance of business common sense
- The relevance of the contract as a whole
- The primacy of the contractual language or loyalty to the text
- The role of the legal, regulatory, and factual matrix
- Balancing the principles
- Prior negotiations and subsequent conduct
- Purposive construction
- Public policy and strict construction
- The need for certainty
- Lawful effect
- Apparent incompleteness
- Badly drafted contracts
- Vagueness and ambiguity
- Ambiguity no longer a precondition to the contextual approach
- Reaction to the Investors Compensation Scheme restatement
- Reaffirmation and entrenchment
- Discarding intellectual baggage?
- The role of construction in the wake of discharge for breach or termination
- The position of third parties and transferees
- Precedential force and the citation of authorities
- Twelve Leading Decisions of the House of Lords and the Supreme Court
- 1.135
- 1.136
- Prenn v Simmonds
- Schuler v Wickman Machine Tool Sales
- Reardon Smith v Hansen-Tangen (The Diana Prosperity)
- The Antaios
- Charter Reinsurance v Fagan
- Mannai Investments v Eagle Star Assurance
- Investors Compensation Scheme v West Bromwich Building Society
- Bank of Credit and Commerce International v Ali
- The Starsin
- Chartbrook v Persimmon Homes
- Rainy Sky v Kookmin Bank
- Arnold v Britton
- Concluding Observations
- Where are we now?
- The Lloyds Bank Bonds case
- The Globe Motors summary: changes of emphasis
- Wood v Capita : the Supreme Court stresses continuity
- Summary of leading principles and policies
- 2 Comparative and Theoretical Perspectives
- 3 The Objective Principle of Construction
- Preliminary Material
- Overview
- 3.01
- Formation and construction
- ‘Promisee objectivity’ and ‘detached objectivity’
- Lord Denning and ‘fly-on-the-wall objectivity’
- Objectivity and the construction of contracts
- Objective test of formation is an amalgam of objective and subjective
- Does the objective test of construction have a subjective element?
- The role of the ‘intentions of the parties’
- The Objective Principle in Contract Formation
- The Objective Principle in Interpretation
- 3.39
- Victorian origins of the objective principle
- Twentieth-century statements of principle
- The interplay of the objective principle and the available background
- Personification of the objective principle: the ‘reasonable person’
- Rational choice theory
- The objective principle and standard form contracts
- Contract binding on its true construction even if parties were not in agreement
- Objectivity and ‘presumed common intention’
- A different approach in New Zealand: Professor McLauchlan, Thomas J, and ‘common actual intention’
- Objectivity and contracts partly oral or partly by conduct
- A subjective coda?
- The law of agency
- The Objective Principle in Implication
- The Objective Principle in Rectification
- 4 Internal Context: The Whole Contract Approach
- Preliminary Material
- 4.01
- 4.02
- 4.03
- The Whole Contract or Holistic Approach
- The Constituent Parts of a Contract
- 5 External Context: Surrounding Circumstances, ‘Matrix’, and ‘Background’
- Preliminary Material
- Overview
- Key Points
- The Traditional Approach: The Surrounding Circumstances
- What were the ‘surrounding circumstances’ in the nineteenth century?
- Shore v Wilson
- Lord Wensleydale on ‘surrounding circumstances’
- Lord Blackburn’s statement of principle
- Lewis v Great Western Railway Company
- Macdonald v Longbottom
- Bank of New Zealand v Simpson
- Bank of Australasia v Palmer
- Charrington v Wooder
- The Modern Approach: ‘Matrix’ to ‘Background’
- The Exclusionary Rules
- The restriction on prior negotiations and declarations of subjective intent
- The classical statement of the ‘prior negotiations’ rule
- Modern case law on prior negotiations
- The rise and fall of The Karen Oltmann
- No direct evidence of the parties’ intentions
- Prior negotiations admissible
- Deletions or alterations to a standard form
- Use of dictionaries
- Context-driven and policy-based restrictions on admissible background
- The restriction on subsequent statements and conduct
- Exceptions to the exclusionary rule
- The Future
- 6 Standard Form Contracts, Public Policy, and the Realms of Strict Construction and Strict Compliance
- Preliminary Material
- 6.01
- 6.02
- 6.03
- 6.04
- Key Points
- Standard Form Contracts
- Other Examples of Strict Construction
- Strict Compliance and Contractual Machinery
- 7 Presumptions
- Preliminary Material
- Statutory Presumptions
- Common Law Presumptions
- The presumption that a contracting party cannot take advantage of its own wrong
- The presumption that clear words are required to exclude or modify remedies that arise by operation of law
- Presumption of legality
- Presumption against impossibility
- Presumption of technical legal usage in document drafted by lawyers
- Presumption in favour of one-stop dispute resolution
- 8 Maxims
- 1 Principles and Policies
- Part II Related Doctrines
- 9 Implication of Terms: General Principles and Implied Terms at Law
- Preliminary Material
- General Principles of Implication of Terms
- 9.01
- Incompleteness and lack of contractual specification
- Terminology: construction, interpretation, and implication
- Interpretation and implication
- The seminal distinction between the two sub-categories of implied terms
- Terms implied in law and terms implied in fact
- Necessity and reasonableness
- Terms implied in law
- Terms implied in fact
- Implied terms and contractual discretion
- Question of law
- The doctrine of precedent
- Implication of Terms at Law
- Principles for Developing New Implied Terms at Law
- Implied Terms and the Employment Relationship
- Implied Terms as to Cooperation
- Implied Terms and Contractual Discretions
- 10 Implied Terms in Fact
- Preliminary Material
- Introduction
- The Relationship between Implication and Interpretation
- The Relationship between Implication and Rectification
- The Traditional Tests for the Implication of Terms in Fact
- Implication in Fact as Part of the Process of Construction: Attorney-General for Belize v Belize Telecom Ltd
- Insisting on the Necessity Threshold: Marks and Spencer v BNP Paribas Securities
- Applying the Technique of Implication in Fact
- Some Particular Types of Implied Terms
- Entire Agreement Clauses and Implied Terms
- 11 New Horizons: Good Faith, Contractual Discretions, and Human Rights
- 12 Custom and Usage
- 13 Technical and Legal Language
- 14 Formation and Certainty
- 15 Proof of Terms and Incorporation of Terms
- Preliminary Material
- 15.01
- Key Points
- Proof of Terms
- Reduction to writing
- The impact of ‘entire agreement’ clauses
- The past: the ‘Parol Evidence Rule’, its exceptions, and its demise
- Attempts to resuscitate the parol evidence rule
- ‘Somewhat old-fashioned’?
- What was the parol evidence rule?
- What were the exceptions to the parol evidence rule?
- 15.21
- Exception (1): document not intended to be whole contract
- Exception (2): collateral contracts and warranties
- Exception (3): surrounding circumstances
- Exception (4): subject matter or identity
- Exception (5): technical or scientific language
- Exception (6): trade usages or terms
- Exception (7): ancient documents
- Exception (8): foreign language
- Exception (9): non est factum and vitiating factors
- Exception (10): characterization or sham
- Lord Wedderburn’s critique
- The Law Commission report
- The approach of the leading texts
- The authorities
- The demise of the ‘best evidence’ rule
- Incorporation of Terms
- Incorporation by Signature
- Incorporation by Notice
- Incorporation by a Course of Dealing
- Incorporation by Reference
- The Effect of Misrepresentation
- Limitations on Incorporation: The Effect of the Interfoto Principle on ‘Onerous and Unusual’ Terms
- 16 Parties, Third Party Effects, and Clauses Precluding Assignment
- Preliminary Material
- 16.01
- Identifying the Parties to the Contract
- The Third Party Effects of Contracts
- Anti-assignment Clauses
- 17 Rectification and Correcting Mistakes through Construction
- Preliminary Material
- 17.01
- 17.02
- Construction as a Technique for Correcting Mistakes in Expression
- 17.03
- 17.04
- 17.05
- No jurisdiction to claim rectification
- Misdescription
- Supplying words
- Disregarding clauses or words
- Transposing words
- The leading nineteenth-century authority
- The East v Pantiles Plant Hire test
- The principles for correcting mistakes by construction
- Modern examples of ‘correcting mistakes by construction’
- Penal provisions
- Rectification of Documents in Equity
- Common Mistake
- 17.43
- Prior agreement or continuing common intention
- The test for establishing intention
- The redundancy of ‘common mistake’ rectification?
- Unilateral Mistake
- General Matters
- 18 Common Assumptions, Estoppel by Convention, and Estoppel by Deed
- 19 Construction and Mistake as a Vitiating Factor
- 9 Implication of Terms: General Principles and Implied Terms at Law
- Part III Particular Contractual Provisions
- 20 Conditions, Warranties, and Indemnities
- Preliminary Material
- Conditions
- The varieties of conditions
- Conditions and elective discharge or termination
- The nature of discharge for breach
- Characterizing conditions, warranties, and intermediate terms
- Warranties
- Warranties in Business Acquisition Contracts
- Indemnities
- Construction of Indemnity Clauses
- 21 Exemption Clauses and Unfair Contract Terms
- Preliminary Material
- Introduction
- Construction of Exemption Clauses
- Excluding Liability for Negligence
- Carving out Fraud
- ‘Direct’, ‘Indirect’, and ‘Consequential’ Losses
- General Approach to the Unfair Contract Terms Act 1977
- 21.83
- 21.84
- 21.85
- Cases on the reasonableness test
- Grounds for appeal
- Pleading and practice under the Unfair Contract Terms Act 1977
- The Consumer Rights Act 2015
- 22 Change of Circumstances and ‘ Force Majeure ’ Clauses
- Preliminary Material
- 22.01
- 22.02
- 22.03
- 22.04
- 22.05
- Key Points
- The Common Law Doctrine of Frustration
- Incorporating Express Terms to Deal with Changes of Circumstances
- Construction of the Operation and Effect of Force Majeure Clauses
- Are force majeure clauses exemption clauses?
- Does contra proferentem apply?
- Do the Canada Steamship guidelines apply?
- Does ejusdem generis apply to general words or ‘sweeping words’?
- Taking reasonable steps to avoid the event
- Beyond control
- ‘Every effort will be made to carry out this contract …’
- Knowledge of circumstances at the time of the contract
- Burden of proof
- Public regulation
- 23 Modification of Remedies: Express Termination, Retention of Title, and No Set-Off Clauses
- Preliminary Material
- 23.01
- Express Termination Clauses
- Key points
- Relationship with discharge for breach
- Mistaken invocation of express termination provisions
- The approach to construction
- Meaning of ‘breach’
- Compliance with procedure
- Meaning of ‘material breach’ and ‘substantial breach’
- Meaning of ‘terminated’
- Relationship between express provisions and the common law regime
- Statutory control
- The measure of damages following the exercise of an express termination right
- Relief against forfeiture
- Retention of Title
- Restriction of Set-off
- 24 Payment, Agreed Damages, and Acceleration Clauses
- 25 Time Stipulations
- 26 The Integrity of the Instrument: ‘Entire Agreement’ and ‘Non-Reliance’ Clauses
- Preliminary Material
- Introduction
- ‘Entire Agreement’ and ‘Non-reliance’ Clauses
- Construction of Entire Agreement Clauses
- Entire Agreement Clauses and Collateral Warranties
- Alman v Associated Newspapers: origin of ‘non-reliance’ clauses
- Trident Turboprop v First Flight Couriers: ‘no representations’ clause
- Thomas Witter v TBP Industries
- EA Grimstead & Son Ltd v McGarrigan
- Deepak v ICI
- Government of Zanzibar v British Aerospace
- The Inntrepreneur Pub cases
- Watford Electronics Ltd v Sanderson CFL Ltd
- Infiniteland Ltd v Artisan Contracting Ltd
- Non-reliance Clauses and Excluding Liability for Misrepresentation
- 26.42
- Evidential estoppel
- Lowe v Lombank
- Subsequent consideration of Lowe v Lombank
- Chadwick LJ’s analysis of ‘non-reliance’ clauses
- Estoppel by contract
- Springwell Navigation v J P Morgan Chase
- Springwell: the attack on Peekay at first instance
- Springwell: the attack on Peekay in the Court of Appeal
- Exceptions to the estoppel by contract principle
- Quest-4-Finance v Maxfield
- Conclusions on Peekay and Springwell
- Statutory Regulation
- The Misrepresentation Act 1967
- 26.77
- The requirement of reasonableness
- McGrath v Shah
- Thomas Witter Ltd v TBP Industries Ltd
- Government of Zanzibar v British Aerospace
- Inntrepreneur Pub Co v East Crown Ltd
- Watford Electronics Ltd v Sanderson CFL Ltd
- SAM Business Systems Ltd v Hedley
- IFE Fund v Goldman Sachs
- Trident Turboprop (Dublin) v First Flight Couriers
- Springwell Navigation v J P Morgan Chase
- The Law Commission on ‘merger clauses’
- Entire agreement clauses and consumer contracts
- The Misrepresentation Act 1967
- Entire Agreement Clauses and Implied Terms
- Impact of Entire Agreement Clause on Extrinsic Evidence
- Final Comparative Reflection
- 20 Conditions, Warranties, and Indemnities
- Part IV Rules Relating to Written Contracts
- Part V Construction and Practice
- 28 Evidence and Practice
- Preliminary Material
- The Modern Law of Civil Evidence
- The Best Evidence Rule
- Practice: Procedures for Determining Issues of Construction
- 28 Evidence and Practice
- Part I The General Part
- Further Material
- [34.238.189.240]
- 34.238.189.240
