Q&As

Is the use of ‘and/or’ considered best drafting practice in commercial agreements? How do the courts interpret the use of this phrase?

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Published on LexisPSL on 23/07/2019

The following Commercial Q&A provides comprehensive and up to date legal information covering:

  • Is the use of ‘and/or’ considered best drafting practice in commercial agreements? How do the courts interpret the use of this phrase?
  • General contract interpretation
  • Interpretation of ‘and/or’

Is the use of ‘and/or’ considered best drafting practice in commercial agreements? How do the courts interpret the use of this phrase?

Where parties disagree on the meaning of an incorporated term, it will be the task of the court to objectively construe the meaning of the term, having regard to the words used, the contract as a whole and the relevant factual background known to the parties at the time of contracting. Where parties have reached agreement, a court will strive to give that agreement meaning. It is therefore important that the meaning of any phrase incorporated into a commercial agreement is clear and unambiguous.

General contract interpretation

The leading statement on interpretation of contracts is Lord Hoffmann’s statement in Investors Compensation Scheme v West Bromwich Building Society. For further reading on Hoffman’s five key principles, see Practice Note: Contract interpretation—the guiding principles.

In summary, these five principles have be adequately described by Lord Bingham in BCCI v Ali:

‘To ascertain the intention of the parties the court reads the terms of the contract as a whole, giving the words used their natural and ordinary meaning in the context of the agreement, the parties’ relationship and all the relevant facts surrounding the transaction so far as known to the parties. To ascertain the parties’ intentions the court does not of course inquire into the parties’ subjective states of

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