'Surrounding Circumstances' in Contractual Interpretation: Where are we Now?
Commercial Law Quarterly, vol. 32, no. 3, 2018, pp. 3-11.
14 Pages Posted: 27 Sep 2018 Last revised: 24 Oct 2018
Date Written: September 20, 2018
For several decades, the High Court’s pronouncements on the subject of contractual interpretation have generated confusion in intermediate appellate courts and caused considerable academic debate. The key difficulty relates to the question of when recourse may be had to evidence of ‘surrounding circumstances’ as an aid to construction. In particular, a controversy has emerged in recent years as to whether it is necessary to point to ‘ambiguity’ as a precondition for the use of such evidence as an aid to construction. Though this question is fundamental and of some considerable importance, the task of answering it is far from straightforward. The object of this short article is to explain the nature of the difficulty in respect of this question, and to consider a number of recent developments both in the High Court and in intermediate appellate courts. In doing so, it is sought to offer an assessment of the present state of the law and a view as to its likely future development.
Keywords: contracts, interpretation, evidence admissible in construction, context, ambiguity, legal uncertainty, role of apex court
JEL Classification: K10, K12, K30
Suggested Citation: Suggested Citation