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
- Ordinary menaing of words
- The Objective approach
- Certainty or effectiveness of agreements
- The Contra Proferentem Rule
- The Ejusdem General Rule
- Experssio unius est exclusion alterius
- Negotiated terms preferred to pro forma
- Priority of express terms over Implied terms
- Preference for Resonable effect vc Absurdity
- Vague general terms limited by precise terms
- Extrinsic Evidence and additional terms, contract (s) act 1997
- Exttinsic evidence and interpretation; common law excludes but exceptions for
latent ambiguity, formation context, customs, written admission, abogados de accidentes florida
- 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
- 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)
- 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
- 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.
- 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
- 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.
- 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
- 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
- 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
- Vague general terms limited by precise terms. This is another way of expressing the Ejusdem Generis rule
- Extrinsic evisence and additional terms
- 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