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WHAT DO THE WORDS MEAN: DIFFERENT APPROACHES TO THE INTERPRETATION OF CONTRACTS

International Construction Law Review

WHAT DO THE WORDS MEAN: DIFFERENT APPROACHES TO THE INTERPRETATION OF CONTRACTS Wolfgang Breyer Breyer-Rechtsanwaelte Júlio César Bueno Partner, Pinheiro Neto Advogados, São Paulo, Brazil Brian Gaudet Kilpatrick Townsend & Stockton LLP Shy Jackson Partner, Pinsent Masons LLP ABSTRACT Disputes about the meaning of contractual clauses are a common issue on construction projects. This is the case when dealing with bespoke contracts but even standard forms of contract can give rise to such issues. All the more so in an international context when the parties’ own native languages are not the ones used to draft, and operate, the contract. Different legal systems will have different ways of identifying what the words mean and whether, for example, it is possible to look at pre-contractual communications, the parties’ conduct or whether the words make commercial sense. Clear drafting can help avoid such uncertainty, but there are differences on what constitutes good practice in drafting. This paper discusses the different approaches in different jurisdictions to interpreting contracts and what can be done to ensure that contracts are clear. “Everyone outside a court … recognises that words are imprecise instruments for communicating the thoughts of one man to another” (Lord Diplock in Slim v Daily Telegraph (CA) [1968] 2 QB 157; [1968] 1 All ER 497) INTRODUCTION Regardless of the legal system chosen, the words used by parties when writing their contracts form the basis for contractual relationships and if Pt 2] What do the Words Mean: Different Approaches 173

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