Common Intention and Contract Interpretation

Abstract:     
This article challenges the orthodox view that, in adjudicating upon contract interpretation disputes, the task of the courts is to determine the parties’ presumed intention and that evidence of the parties’ actual mutual intention, usually to be found in their communications in the course of negotiating the contract, is irrelevant and inadmissible as an aid to interpretation. It is argued that, in any event, little of substance is left in the rule excluding evidence of prior negotiations once it is accepted that such evidence is admissible to prove that relevant background facts were known to the parties and that the safety devices of rectification and estoppel are alternative means of enforcing an agreed meaning. The courts are highly unlikely nowadays to give a meaning to contractual terms that is inconsistent with a clearly proven consensus of the parties.

Number of Pages in PDF File: 22

Keywords: contract, intention, interpretation

JEL Classification: K12

Accepted Paper Series