Term of Contract

Terms of contract – Interpretation and Construction

Content of agreemnts. What if contect is disputed ? Is it incorporated or not? What if the meaning of content is disputed, what do terms actually mean?

Legal rules to be applied if dispute? Common Law rules, Staturory rules e.g. Contracts (s) Act 1997, UCTA 1977, UTCC regs 1999

  1. Ordinary menaing of words
  2. The Objective approach
  3. Certainty or effectiveness of agreements
  4. The Contra Proferentem Rule
  5. The Ejusdem General Rule
  6. Experssio unius est exclusion alterius
  7. Negotiated terms preferred to pro forma
  8. Priority of express terms over Implied terms
  9. Preference for Resonable effect vc Absurdity
  10. Vague general terms limited by precise terms
  11. Extrinsic Evidence and additional terms, contract (s) act 1997
  12. Exttinsic evidence and interpretation; common law excludes but exceptions for

latent ambiguity, formation context, customs, written admission,  abogados de accidentes florida

  1. Ordinary meaning of words

Unless the context indicates otherwise, ordinary words are presumed to be used in their ordinary sense, given their ordinary menaing, technical jargon presumed to be used in their technical sense, otherwise, words given their clear everyday meaning

  1. The Objective approach. This is another aspect of the rule in Muirhead and Turnbull v Dickson 1905, the piano case. Cts apply what the parties appear to have meant viewed from a reasonable, objectibe perspective. Not from one P’s entirely subjectibe “innermost mind” view (no matter how sincere)
  2. Certainty or effectiveness of agreements. If > one interpretation is possible, Cts orefer that which gives effect over that which would not. Ambiguitu interpreted purposively if reasonable possible. But iof essential matter is left too vague then no consensus and no contract. Cts prefer interpretations which produce efficacy. Cts resist interpretation that produces absurdity or contrary to common sense. But per Matheieson Gee Ltd v Quigley 1952 – Ct will not construct agreement if there is none despite parties wishes or expression to contrary. Sole function of CT is to interpret what the parties have agreed not to invent or make it up
  3. The Contra Proferentem Rule. If the term is unclear, ambiguous, its construed against the interests of the P founding on it. E.g in a way least favourable especially if it’s a standard term and not individually negotiated. Especially to prevent prejudice to the other party. Prevents one P taking unfair advantage of other, will not be allowed wide latitude to detriment of the other. Example – exclusion of liability clauses in insurance contracts imposed by Ins CO. Interoperated narrowly as possible if any ambiguity.
  4. The Ejusdem Generis Rule – literally means “ of the same kind” In a list like terms, vague or general terms are limited by associated specific or precise terms. Employees will wear shirt and tie and suit or other smart dress at all time- means what? EGR is a presumption e.g. without prejudice to the generality of the following items, students shall not bring coffee, tea, juice, water, pies, rolls, confectionary, fruit or any other food or drink whatsoever into lectures
  5. Expressio unius est exclusion alterius – Presumption only. Specific mention of one thing and omission of other things excludes those other things. E.g. you book a room for a meeting and order coffee at break time. This excludes tea and biscuits but its implied that boiling water, milk, sugar and cups will be supplied.
  6. Negotiated terms preferred to pro forma- Terms which the parties have given specific consideration to in the negotiations are presumed to be more accurate reflection of parties’ intention than pre-printed pro forma standard terms which have not been discussed. This will apply only if there is a dispute/conflict between negotiated and pro forma in same contract. However, pro forma standard terms perfectly valid and apply otherwise
  7. Priority of express over implied terms. These terms may be written or oral. Express prevail unless the implied terms are obligatory statutory ones which the law does not allow to be excluded. E.g. unfair contract terms legislation
  8. Preference for Resonable effect over absurdity. Cts prefer meanings which give the contract reasonable effect. Cts resits meaning which would fly against common sense or produce absurdity
  9. Vague general terms limited by precise terms. This is another way of expressing the Ejusdem Generis rule
  10. Extrinsic evisence and additional terms
  11. Extrinsic evidence and interpretation

If contract is written then EE could be parole evidence or other written material. Parties may wish to rely on EE for one or two reasons. To prove additional terms which are not within the 4 cornrs of the written contract. Also, to interpret the terms of (written) contract. Thus, additional terms, interpretation of terms.

EE and Interpretation of terms

Cotract but many exceptions including: latent ambiguity, surrounding circumstances, trade customs, written admissions of party now denying something

Case law to remember

C-265/95 Commission v France (Spanish Strawberries) 1983

Intro: Since the accession of Spain to the European Economic Community (EEC) in 1986, French fruit (particularly strawberry) and vegetable producers have reportedly suffered economic losses from competition with Spanish producers. As early as 1985, French farmers began to take destructive actions against Spanish produce imported into France.

Case: French farmers (including Coordination Rurale) vandalized and destroyed produce being imported from other Member States. These incidents continued through 1997. Meanwhile, it was alleged that French officials did little or nothing to stop French farmers from destroying agricultural goods from other Member States. Particularly, it was asserted that French police who were monitoring the protests, failed to protect foreign trucks and produce from vandalism and destruction by French farmers.

Legal Problem/Question: On July 19, 1994, the Commission commenced proceedings under Article 169 of the EC Treaty, alleging that France had failed to fulfil its Treaty obligations. France replied that it had sought to combat the vandalism by implementing preventative measures and through prosecuting offenders in French courts. In response, the Commission formally issued a reasoned opinion pursuant to Article 169(1)” alleging France’s failure to meet its obligations and inviting France to comply with the opinion within one month of its issue.

Decision: The CJ faced a situation of civil disorder, by French farmers blocking imports of agricultural produce, contrary to Article 34 TFEU. Despite complaints by the Commission, the French authorities had failed to take any significant action to prevent the demonstrations, arguing that more determine action might lead to more serious breaches of public order or even social conflict. The CJ refused to accept these arguments: Apprehension of internal difficulties could not justify a failure by a MS to apply union law correctly… It was for a MS to guarantee the full scope and effect of that law, to ensure its proper implementation, unless that state could show that action by it could have consequences for public order with which could not cope.

On those grounds, the Court of Justice declared that by failing to adopt all necessary and proportionate measures in order to prevent the free movement of fruit and vegetables from being obstructed by actions by private individuals, the French Republic had failed to fulfil its obligations under article 30 of the EC Treaty, in conjunction with article 5 of that Treaty, and under the common organisations of the markets in agricultural products.

How affected EU:



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Internal EU Law (Pre Brexit)


Free movement of Goods: Protection of the health and life of humans, animals and plants. p410

42/82 Commission v France (Italian Table Wine) 1983 ECR 1013 .


Intro: Commission Regulation 1153/75 requires all commercial movement of wine within the EEC to be accompanied by a ‘wine passport’ (form VA 1). Wine imported from one member-State into another may, therefore, lawfully be checked at the frontier to ensure that it is in fact accompanied by a VA 1 form, properly completed and issued by the authorities of the exporting member-State. The import of wine may lawfully be the subject of health inspections under Article 36EEC. In the absence of any reasonable suspicion on the basis of specific evidence in a given case, such inspections, if they take the form of analysis, should however be spot checks and not systematically applied to all or most of the total imports from a particular member-State.

Case:  Between April 1980 and July 1981 the French authorities directed a number of communications to the Italian authorities with regard to certain irregularities or infringements which they had discovered in respect of transports of Italian wine. Thus there were two cases in which wine arrived in France in the tanks of ships in a polluted condition, in the one case through hydrocarbons and in the other case through paraffin. In the former case the pollution was caused by the fact that conversion work on a former oil tanker had not been carried out properly. In the latter case an Italian company was suspected of having transported in road tankers alternately wine and additives for lubricating motor vehicles. Furthermore, the communications in question related in particular to irregularities discovered in the VA 1 forms accompanying two consignments of wine and to a request for information on the steps taken in Italy with regard to the filtering of wine involving the use of asbestos. For more information, visit Notary public London Continue reading “Internal EU Law (Pre Brexit)”