Contract interpretation—admissibility of surrounding documents
Contract interpretation—admissibility of surrounding documents

The following Dispute Resolution guidance note provides comprehensive and up to date legal information covering:

  • Contract interpretation—admissibility of surrounding documents
  • Contract interpretation—starting point—the contract itself
  • Contract interpretation—documents forming part of the same transaction
  • Contract interpretation—supplemental documents
  • Contract interpretation—earlier drafts
  • Contract interpretation—accompanying explanatory notes
  • Contract interpretation—deleted words
  • Contract interpretation—previous agreements
  • Contract interpretation—published precedents
  • Contract interpretation—sequential negotiations

Contract interpretation—starting point—the contract itself

Unless alleging mistake, fraud or misrepresentation, parties are bound by the documents which they sign, whether or not they have read those documents.

Therefore, the starting point will always be the contract which has been signed by the parties.

However, given the general guiding principles governing interpretation (see Practice Note: Contract interpretation—the guiding principles) it is clear that this is not limited purely to an analysis of the ‘four corners of the contract’ but that, where relevant, the background matrix of fact may also be considered.

Issues commonly faced by lawyers advising clients on potential or actual contractual disputes, include:

  1. what is the parol evidence rule and are there any exceptions to it? See Practice Note: The parol evidence rule in interpreting contracts

  2. when can surrounding documents be relied upon in construing the meaning of a contract, this might include drafts, supplemental documents, explanatory notes? This is the focus of this Practice Note

  3. when can pre-contractual statements or negotiations be relied upon? See Practice Note: Contract interpretation—admissibility of pre-contractual negotiations and statements

  4. what is the effect of an entire agreement clause? See Practice Note: Contract interpretation—interpreting entire agreement clauses

In Goldman Sachs v Videocon Global, the Court of Appeal (in dismissing an application for permission to appeal Teare J's decision awarding the claimant summary judgment of its US$4m