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Contract

15 December 2011
Issue: 7494 / Categories: Case law , Law digest , In Court
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Hyundai Merchant Marine Company Ltd v Trafigura Beheer BV [2011] EWHC 3108 (Comm), [2011] All ER (D) 55 (Dec)

It was established law that the ultimate aim of interpreting a provision in a contract, especially a commercial contract, was to determine what the parties had meant by the language used: that involved ascertaining what a reasonable person would have understood the parties to have meant. The relevant reasonable person was one who had all the background knowledge which would reasonably have been available to the parties in the situation in which they had been at the time of the contract. Where the parties had used unambiguous language, the court had to apply it. However, if it was capable of more than one construction, one chose that which seemed most likely to give effect to the commercial purpose of the agreement.

It was necessary when construing a commercial document to strive to attribute to it a meaning which accorded with business common sense. It would be wrong to approach a question of construction with any predisposition to find inconsistency

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Winckworth Sherwood—Charlie Hancock

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