Contract Interpretation (LAWS70335)

The law of contract interpretation is one of the most practically important areas of commercial law. Issues of interpretation occupy a good deal of the time of commercial practitioners and judges. Such issues have been aptly described as the very lifeblood of commercial law. Not surprisingly, therefore, interpretation disputes have become the most frequently litigated contract cases in recent years. Their outcome is also notoriously difficult to predict. Time and again judges have disagreed not only on the correct approach but also on such elementary questions as whether particular words have a plain meaning and what is the ‘common-sense’ or ‘commercially realistic’ interpretation. This subject, which will also examine the closely related principles concerning formation and rectification of contracts, will seek to shed light on the reasons for such disagreement and discuss the competing approaches to the interpretative task. The lecturer has taught and written extensively in the area

This subject will examine the principles governing the interpretation of commercial contracts, as well as the closely related principles concerning formation and rectification of contracts.

Principal topics through a series of case studies include:

• The relationship between principles of contract formation and contract interpretation
• The objective approach and its limits
• The relevance of the parol evidence rule
• The status of the plain meaning ‘rule‘
• The effect and implications of Lord Hoffmann‘s fundamental restatement in the Investors Compensation Scheme case and the reception of this restatement by the courts in Australia and New Zealand
• The equitable remedy of rectification
• The admissibility of prior negotiations and subsequent conduct as aids to interpretation
• The differences between the common law principles of contract interpretation and those contained in important international instruments such as the United Nations (UN) Convention on Contracts for the International Sale of Goods, the Unidroit Principles of International Commercial Contracts and the Principles of European Contract Law.

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