Contracts: interpretation

by Gerard McMeel KC, Quadrant Chambers

A practice note that reviews the principles governing the interpretation (sometimes called construction) of the express terms of written contracts. This practice note offers essential guidance for lawyers and contract managers on navigating potential disputes over contractual meaning during negotiations and litigation. It outlines the main principles of modern contract interpretation, including the objective test for ascertaining the parties' intentions, the primacy of the contractual text, the whole contract approach, and the application of business common sense. This practice note explores the iterative process courts use to balance these principles, citing key case law. It also identifies arguments that can be used for or against a desired interpretation, addressing topics such as those on inconsistent provisions, headings, the contra proferentem and eiusdem generis rules, and statutory presumptions on interpretation. The note also identifies arguments that, although often used, have less effect than some contract users may think.