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19 July 2024 / Nicholas Dobson
Issue: 8080 / Categories: Features , Contract , Procedure & practice , Banking
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Choose your contract wording carefully

182206
Nicholas Dobson relays the costly tale of a single word in a banking contract
  • Courts are required to consider the ordinary meaning of words used in the context of the contract as a whole and the relevant factual and commercial background, excluding prior negotiations.
  • The aim is objectively to identify the intention of the parties, ie, what a reasonable person having all the background knowledge which would have been available to the parties, would have understood them to mean by using the language in the contract.
  • Interpretation is an iterative process in which rival interpretations should be tested against the provisions of the contract and its commercial consequences.

Lewis Carroll’s Humpty Dumpty had no doubt about the meaning of words: ‘When I use a word… it means just what I choose it to mean—neither more nor less.’ For, as he saw it, it was simply a question of personal autonomy: ‘The question is… which is to be master—that’s all.’ However, unlike Humpty (who had the luxury of being a mere imaginative figment), those in the real world entering contracts regulated

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NEWS
Talk of a reserved ‘Welsh seat’ on the Supreme Court is misplaced. In NLJ this week, Professor Graham Zellick KC explains that the Constitutional Reform Act treats ‘England and Wales’ as one jurisdiction, with no statutory Welsh slot
The government’s plan to curb jury trials has sparked ‘jury furore’. Writing in NLJ this week, David Locke, partner at Hill Dickinson, says the rationale is ‘grossly inadequate’
A year after the $1.5bn Bybit heist, crypto fraud is booming—but so is recovery. Writing in NLJ this week, Neil Holloway, founder and CEO of M2 Recovery, warns that scams hit at least $14bn in 2025, fuelled by ‘pig butchering’ cons and AI deepfakes
After Woodcock confirmed no general duty to warn, debate turns to the criminal law. Writing in NLJ this week, Charles Davey of The Barrister Group urges revival of misprision or a modern equivalent
Family courts are tightening control of expert evidence. Writing in NLJ this week, Dr Chris Pamplin says there is ‘no automatic right’ to call experts; attendance must be ‘necessary in the interests of justice’ under FPR Pt 25
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