Language trumps purpose in relational contracts (Quantum Advisory Ltd v Quantum Actuarial LLP)

Table of contents

• What are the practical implications of this case?
• What was the background?
• What did the court decide?
• Case details

Article summary

Commercial analysis: This case concerns the applicable principles of construing a term in a bespoke relational contract. In summary, the strict rules of construction when interpreting contracts, even when they are relational in nature, firmly remain. The court was asked to decide if the meaning of ‘Services’ (a defined term) which were to be provided by the defendant included tendering for new and or repeat business. The court agreed that the long-term nature of the agreement and the efficient operation of the claimant’s business were important factors to consider in interpreting the agreement. However, those facts did not override the natural and ordinary meaning of the language used in the agreement. This case is a reminder of the importance of clear comprehensive drafting in relational contracts. Written by Ashley Blood-Halvorsen, barrister at 3PB Chambers.