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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

Walkers—Muriel Marseille

Walkers—Muriel Marseille

Ashurst's Chief Risk Officer joins Walkers

Excello Law—John Osborne

Excello Law—John Osborne

Northern family lawyer John Osborne joins Excello

mfg Solicitors—Rebecca Rogers, Kennedy Langley & Victoria Griffiths

mfg Solicitors—Rebecca Rogers, Kennedy Langley & Victoria Griffiths

Trio of promotions announced at Kidderminster law firm mfg Solicitors

NEWS
A sole director can conspire with their own company for the purposes of the tort of unlawful means conspiracy, the High Court has ruled in a judgment with potentially wide implications for business disputes
The Court of Appeal has reinforced that domicile depends on intention rather than residence alone, in a significant post-Brexit ruling on cross-border financial remedy claims
The Chancery Division's long history comes to an end this autumn as it is reborn as the Business and Property Division, prompting questions over whether the shake-up is really necessary
The Financial Conduct Authority (FCA) continues to show that failing to disclose regulatory issues can attract harsher consequences than the original misconduct itself
Rejecting a generous settlement can prove an expensive mistake, as two recent high-profile cases demonstrate
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