Where wording is ambiguous and there is more than one possible meaning, the court is likely to adopt the interpretation that better reflects commercial or business common sense, as long as this does not conflict with the natural meaning of the words used. Business common sense will be applied when appropriate - to avoid an uncommercial result In short, this means that interpretation will be based on an understanding of the contract by a reasonable hypothetical person who was aware of the relevant context of the contract and the factual background at the time the contract was entered into. The starting point will be a straightforward objective reading of the actual words of the contract - what does it actually say, on the ordinary meaning of the words that have been used? An objective approach - but with knowledge of context What are the main principles of contract interpretation? Words will be given their natural and ordinary meaning Contractual interpretation - how can I protect my position?.Does a mixture of standard contract terms and negotiated amendments make any difference to the interpretation of the contract?.What is an order of precedence or priority clause?.What are the main principles of contract interpretation?.Having an understanding of the basics of contractual interpretation, and why particular clauses are important, will enable you to ensure that contracts accurately reflect your intentions. The key point is to get your contract right and clear at the outset, before you sign. There are broad principles of contract interpretation (rather than strict rules) that will be applied by the court if a dispute arises as to what a contract means. Contractual interpretation - are there specific rules on this and how is that relevant to my business? In this article, we cover the basics of contractual interpretation, address common queries and explain what you can do to protect your position.
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