How to approach a contractual interpretation dispute—a practical guide
How to approach a contractual interpretation dispute—a practical guide

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

  • How to approach a contractual interpretation dispute—a practical guide
  • Preliminary—approach the document without preconceptions
  • Stage 1—actually read the clause
  • Stage 2—read the whole agreement
  • Stage 3—consider the relevant background to the agreement
  • Stage 4—take stock
  • Stage 5—dealing with uncertainty

This Practice Note provides a practical framework for approaching disputes over the correct construction of a contract. It is based upon the principles of contractual construction set out in Practice Notes:

  1. Contract interpretation—the guiding principles

  2. Contract interpretation—rules of contract interpretation

and should be read in conjunction with that guidance.

The scenarios in which such disputes arise are infinitely varied. However, whether it arises in the context of a client approaching you complaining of an unexpected demand from another contracting party or in the response from a third party of whom you have made such a demand, the basic assertion is universal—‘that’s not what was agreed’.

When this assertion is raised, practitioners will usually be aiming to bring the dispute to a conclusion swiftly and without the need for costly litigation. Having a sound grasp of how a court would approach the construction of the term(s) in dispute will enable practitioners to make confident decisions about whether it is in the client’s bests interests to litigate the matter if it is not possible to reach a satisfactory compromise. It is tailored towards written agreements.

Preliminary—approach the document without preconceptions

Don’t let your client or the other party’s interpretation of the clause colour your own independent view.

A judge will look at the agreement from an objective perspective and will ignore the parties’ subjective views of what was agreed. See Practice Note:

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