The following Dispute Resolution guidance note provides comprehensive and up to date legal information covering:
The basic approach of contract interpretation as provided by Lord Hoffmann’s five principles in ICS v West Bromwich Building Society (see Practice Note: Contract interpretation—the guiding principles) is supplemented by general rules or guidelines (also known as 'canons of construction') which can be used to assist in ascertaining the meaning of a written contract. This Practice Note considers the most important of these guidelines, namely:
the whole of the document relevant
commercial sense (business common sense)
avoiding an unreasonable result
cutting down rights and remedies
consistency of terms (interpreting construction contracts)
standard printed terms and special terms
general and specific provisions
saving the document
mistakes in the contract
contra proferentem principle
ejusdem generis principle
do express terms negative implied terms when interpreting a contract?
weighing the evidence
no oral modification (NOM) clauses
interpreting oral contracts
For related guidance on contract interpretation, see Practice Notes:
Contract interpretation—the parol evidence rule in interpreting contracts
Contract interpretation—admissibility of pre-contractual negotiations and statements
The document should be considered as to its whole effect and not just the impact of individual terms. Therefore, while the issues in a case may narrow to the interpretation of one specific clause, its interpretation must be considered within the context of the document as a whole (Charter Reinsurance v Fagan, Re Sigma Finance).
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