Are the courts returning to a more traditional approach to the construction of contracts, asks Benjamin Pilling QC
At the heart of many commercial cases is a written agreement. Words which may have seemed clear in the meeting room when the contract was signed can seem impossibly obscure years later in a court room. Cases are won or lost on the resolution of these difficulties, and generations of commercial lawyers have devoted themselves to developing arguments as to how commercial contracts should be interpreted.
Tension
The courts’ decisions in these cases are often marked by a tension between: (i) the natural meaning of the words used; and (ii) a purposive meaning which makes commercial sense. This tension has been explored in a long line of authorities beginning with the House of Lords’ decision in Prenn v Simmonds [1971] 1 WLR 1381, [1971] 3 All ER 237 and culminating in the Supreme Court’s decision in Rainy Sky SA v Kookmin Bank [2011] UKSC 50, [2012] 1 All ER 1137. Those authorities have demonstrated an increasing willingness on the part of the courts to adopt a flexible approach to
