CONTRACT INTERPRETATION: A FRESH QUEST FOR CONTRACTUAL CERTAINTY IN COMMERCIAL DEALINGS?
Commercial contracts are working documents. They are used by businesspeople to navigate day-to-day commercial life; how goods are to be produced and services performed.
The law, however, has long been vexed by the issue of how contracts should be interpreted. A century ago, courts were suspicious of interfering in agreements, yet in more recent decades have moved away from the black letter to wider contextual inquiry. But not without cost. The loss of certainty occasioned by the diminishing in value of the words used by the parties is, in turn, exacerbated by the significant increase in costs heaped upon litigants when asked to establish – through wide-ranging discovery, witness briefs and days of testimony – the background surrounding circumstances from which a contract arises like a mythical phoenix.
It is, therefore, appropriate that a historian has led a brave retreat to the black letter in a renewed quest for contractual certainty.
“A luxurious occupation”
The doctrine of freedom of contract – by which parties are permitted to agree terms without interference from the state, including its courts – found a robust advocate in Sir George Jessel MR. In Printing and Numerical Registering Co v Sampson (1875) 19 Eq 462, the Master of the Rolls famously observed that “contracts when entered into freely and voluntarily shall be held sacred and shall be enforced by Courts of justice”.
Jul-Sep 2018 issue