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Contract Interpretation Guide

29 May 2024

The meaning of words used in contracts is of key importance. The choice of certain words or phrases can significantly impact upon the obligations of one party to another and using them in contracts without thought to their meaning and implications can result in uncertainty, unintended consequences, a mismatch of expectations and, ultimately, legal disputes.

Our Dispute Resolution team has compiled this guide, looking at the meaning of some commonly used, but also commonly litigated, contractual terms. We also consider the likely outcomes where parties have not concluded a formal contract at all. Click on the links below to navigate our guide.

Our experienced team is available to discuss any questions you may have - please contact us. 

Topics in our guide:

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What type of breach?

29 May 2024

Contractual breaches can come in many forms. Some are serious, giving the wronged party the right to terminate the contract. Others will be more minor, and might be easily remediable. It can be useful to think of contractual breaches as a sliding scale, with repudiatory breaches at one end, and minor, remediable breaches at the other.

When is consent unreasonably  withheld

When is consent unreasonably withheld?

29 May 2024

The phrase ‘consent not to be unreasonably withheld’ is often seen in commercial contracts. However when is withholding consent actually unreasonable and how can this be determined?

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Unsigned contracts prior to performance

29 May 2024

Though not best practice, it is not uncommon for parties to begin to perform duties under a contract before it is signed. When this situation arises, the question is what terms, if any, are the parties bound by?

Meaning of ‘endeavours’

Meaning of ‘endeavours’

29 May 2024

Contracts often include an obligation for a party to use ‘best endeavours’, ‘reasonable endeavours’ or ‘all reasonable endeavours’, or other variations of the same, to achieve a defined objective. It is sometimes difficult to distinguish what different drafting actually means practice. We provide guidance on how to interpret endeavours clauses below.

interpretation of exemption clauses

Interpretation of exemption clauses

29 May 2024

Parties often include provisions in their contracts that seek to exclude (in its entirety) or limit (to a particular level) a contracting party’s liability in respect of certain types of liability or loss. These clauses can serve the useful purpose of allocating risk between the parties and thereby giving the parties certainty as to what their potential exposure is under the contract.

good faith

Contractual good faith

29 May 2024

The concept of good faith is something of a problem child in contract law. English law has no general doctrine of good faith in contracts. The law has traditionally prized party autonomy in contract formation. That being the case, contracting parties are free to agree to include duties and obligations of good faith in their agreements. This is frequently done, and so despite the absence of a good faith doctrine, the English courts have nevertheless grappled with the question of what is meant by a duty of good faith when interpreting contracts containing such provisions.

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