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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

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MOVERS & SHAKERS

Thackray Williams—Lucy Zhu

Thackray Williams—Lucy Zhu

Dual-qualified partner joins as head of commercial property department

Morgan Lewis—David A. McManus

Morgan Lewis—David A. McManus

Firm announces appointment of next chair

Burges Salmon—Rebecca Wilsker

Burges Salmon—Rebecca Wilsker

Director joins corporate team from the US

NEWS
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Disputing parties are expected to take part in alternative dispute resolution (ADR), where this is suitable for their case. At what point, however, does refusing to participate cross the threshold of ‘unreasonable’ and attract adverse costs consequences?
When it comes to free legal advice, demand massively outweighs supply. 'Millions of people are excluded from access to justice as they don’t have anywhere to turn for free advice—or don’t know that they can ask for help,' Bhavini Bhatt, development director at the Access to Justice Foundation, writes in this week's NLJ
When an ex-couple is deciding who gets what in the divorce or civil partnership dissolution, when is it appropriate for a third party to intervene? David Burrows, NLJ columnist and solicitor advocate, considers this thorny issue in this week’s NLJ
NLJ's latest Charities Appeals Supplement has been published in this week’s issue
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