Lloyd's Maritime and Commercial Law Quarterly
BOOK REVIEW - THE INTERPRETATION OF CONTRACTS
THE INTERPRETATION OF CONTRACTS by Kim Lewison, Barrister. Sweet & Maxwell, London (1989, xlix and 368 pp., plus 7 pp. index). Hardback £45.00.
Problems of contractual interpretation are the staple diet of the courts. Sometimes the problem arises out of some obscurity in the language the parties have used. Almost as often the difficulty is that some event has occurred for which the contract appears to make no provision at all, probably because the parties did not foresee it.
Many decided cases illustrate the first kind of problem. The difficulty may relate to a single phrase or word. In a recent case, for instance, there was doubt whether the term “construction” in an arbitration clause was used in the legal sense of “construing” or the more popular sense of “building”. But the most potent source of obscurity, certainly in the commercial and maritime field, is the artless amendment or adaptation of a standard form of contract without consideration of the effect of what may seem a small change on the meaning of the contract as a whole. Scarcely less potent is the incorporation into a written contract of standard terms, or even worse two sets of differing standard terms, without providing which provisions, if there is inconsistency, shall prevail. Sometimes, in a truly negotiated contract, the parties take refuge in deliberate ambiguity for fear that, if they spell out their contractual aims too plainly, they may invite outright rejection. Better to leave it a little unclear and argue if the need arises.
This apprehension may on occasion explain the failure of contracting parties to provide for readily foreseeable contingencies, but it seems likely that lack of a crystal ball and an optimistic belief that all will go normally and well are more often the reason for such omissions. The problem for the courts is, however, acute. It is not for them to make for the parties a contract they failed to make for themselves. But the desire to produce some reasonable and commercial solution, whether by a process of construction properly so called or by implication, is very strong and perhaps rightly so.
Forensic arguments on construction are never easy (at least for one side), because a judge who has read the contract and studied the papers is likely to have formed a fairly clear view what he thinks the contract means. Most legal arguments lead by a chain of reasoning to a conclusion. In arguments on construction, as has on occasion been judicially admitted, the process is not infrequently reversed. The tentative conclusion comes first, and the chain of reasoning is then forged to support it.
This does not, however, mean that systematic exposition of the principles of contractual interpretation as laid down and applied by the courts is valueless. Far from it. For the party seeking to reinforce the judge’s tentative impression will be greatly strengthened if it can show his conclusion to be justified by principle and authority, and the party seeking to dislodge that impression, perhaps unable to rely on merits to persuade, has even greater need of law to compel.
Mr Lewison has in this book provided just such a systematic exposition. He has stated the existing law in a series of clear and intelligible propositions, supported by a liberal and farranging citation of (mainly English) authority. Universal mastery of the principles expounded here would, no doubt, eliminate most subsequent debate on the meaning of contracts; but for those involved in the debate this book will be an invaluable tool. The book is firmly anchored in the realities of current English practice. This means that the reader renews his acquaintance with many old friends: the golden rule, the matrix of fact, the officious bystander, the falsa demonstratio and many others. But he may make some new
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