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Part II Text and Context, 4 Principle 4: The Context

From: Principles of Contractual Interpretation (2nd Edition)

Richard Calnan

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved.date: 15 April 2024

Bills of lading

This chapter explains that contracts are read in the context of their background facts. These are the facts reasonably available to the parties which are relevant to establishing how a reasonable person would understand what the parties intended by the contract when it was entered into. It discusses the different approaches to context. Some judges are keen to use the context fully. Others would rather limit the extent to which external factors can influence the words of the contract. This is an important practical issue on which there are divergent views, and the chapter discusses the issues concerned and suggests a way forward. It discusses the limitations on the use of context, including the use of prior negotiations and subsequent conduct in interpreting contracts. It also discusses the effect on third parties of a contextual reading of contracts.

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