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Contract Interpretation: What is it About?

48 Pages Posted: 6 Oct 2009 Last revised: 19 Jan 2012

David McLauchlan

Victoria University of Wellington - Faculty of Law

Date Written: October 5, 2009


In recent times contract interpretation has become one of the most contentious areas of the law of contract. There are fundamental divisions among commentators, practitioners and judges (often writing extra-judicially) as to the nature of the task and the permissible aids to interpretation. This article highlights the reasons for these divisions and suggests that the position of those who advocate a liberal approach to the latter issue is sometimes misunderstood. The author argues that there are no convincing reasons of principle, policy or convenience for refusing to receive evidence of prior negotiations and subsequent conduct: in particular, admitting such evidence is not, as commonly thought, inconsistent with the objective approach to interpretation. However, at the same time it is stressed that it will only be in relatively exceptional cases that the evidence will provide a helpful or reliable guide to the true intention of the parties.

JEL Classification: K12

Suggested Citation

McLauchlan, David, Contract Interpretation: What is it About? (October 5, 2009). Sydney Law Review, Vo. 31, pp. 5-51, 2009; Victoria University of Wellington Legal Research Paper No. 1/2012. Available at SSRN: or

David McLauchlan (Contact Author)

Victoria University of Wellington - Faculty of Law ( email )

PO Box 600
Wellington, 6140
New Zealand

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