Purposive Contract Interpretation and the High Court
Australian Bar Review (Forthcoming)
37 Pages Posted: 19 May 2020 Last revised: 21 May 2020
Date Written: April 23, 2020
Purposive justification plays a key role in contract interpretation. As this paper demonstrates, the High Court of Australia has adopted a sensible and principled approach to purposive construction. The Court has paid due regard to the contract text, while still enforcing the objects secured by the contract (where appropriate). Through a detailed analysis of 8 recent decisions of the High Court, this paper outlines a principled approach to purposive contract interpretation. The aim in construction is to infer objective intention from the choice of words in the contract. Each dispute involves a unique contest between arguments based on potential meanings for the words, background, contractual purpose, and so on. However, disputes involving a similar argument composition are resolved in a similar way. In some cases, the meaning of the words is a better indicator of intention. In others, purposive considerations hold sway (particularly when the relevant contractual objective is evident from the contract text). And, in a small number of cases, purposive justification is determinative in that it reinforces a linguistic interpretation or it acts as a tie-breaker between evenly-matched textual or linguistic considerations.
Keywords: Interpretation, Contract, Purposive
JEL Classification: K1, K12
Suggested Citation: Suggested Citation