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11 The Construction of Financial Contracts

From: Principles of International Financial Law (3rd Edition)

Colin Bamford

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2022. All Rights Reserved.date: 06 December 2022

Capital markets

The chapter considers the way in which courts in common law countries interpret financial contracts. It begins by drawing a contrast between the objective of the approach adopted by common law countries (the objective approach) and that which underpins the construction method used in civil law countries (the subjective approach). It argues that the objective approach is more suitable for the purposes of the international financial markets. The chapter then discusses the difference between the meaning of a contractual term and the affect that the operation of the term produces. The chapter moves on to consider the principles by which common law courts determine the meaning of contracts, before concluding with a description of the rules dealing with rectification and with the implication of terms in contracts.

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