When you enter into a contract, you are agreeing to be bound by what it says, not by what you think it means. Only rarely, such as when the meaning would make no commercial sense, will the court substitute its own view of the meaning if the meaning can be divined from the contract itself.

Jonathan Leach therefore advises that it is important to make sure the wording of the contract’s terms is tightly drafted so that arguments over the meaning of clauses do not arise.

An example

Recently, a dispute arose over a contract as to the meaning of the word ‘default’ with regard to the payment of compensation. Did it mean any failure to fulfil the terms of the contract, or did it mean any wilful or deliberate failure to fulfil the terms of the contract?

The answer was easy: the generally accepted meaning of the word applied, not the narrower interpretation that included only wilful or deliberate failure. If that was the meaning one party wished to include, they should have negotiated to put that in the document.

If you are negotiating a contract, it is important to give careful consideration to the meaning of the clauses in it, so that the contract you sign means what you think it means. We can assist you in achieving this aim.

If you would like to seek advice from Jonathan, contact him on 01254 30 10 44 or complete our online enquiry form and one of our experts will contact you.

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