Contact us on

020 7611 4848

email us


Arrange a Callback

Ask a Question

Interpreting a Contract: General Principles

Tuesday, 20 March 2012

Non-lawyers will appreciate that there can be a considerable difference between their own interpretations of a set of facts or words and a court’s interpretation of the same thing. While it is important to recognise that such a difference will often mean expert legal advice should be sought, gaining a basic understanding of how a contract is interpreted can be useful. Below are some general principles that courts apply in the interpretation of contracts.

The Ordinary Meaning of Words
Although it might seem surprising, the usual starting point when constructing a contract is that words should be given their natural and ordinary meaning. This may not necessarily be the dictionary definition or popular meaning but the meaning a reasonable person would ordinarily give to a word. So, for example, a word used in a particular trade may have a specific meaning within that trade and will be interpreted accordingly.

Technical or Scientific Words
Unless there is some contextual reason to do otherwise, technical and scientific words are also given their technical meaning. If in the context of a particular contract it is clear that words are not being used in their technical sense but rather for a particular vernacular meaning, then the vernacular meaning will apply. This aims to ensure that the commercial world is not thwarted by semantic analysis of words. Words used in business contracts must be construed in a common sense business fashion and make good business sense.

Geographic Customs
The meaning and intention of the parties may be considered in the light of relevant geographic customs when giving meaning to words outside their ordinary understanding. However, a court will not necessarily do so simply because that custom exists in a district covered by the contract. The use of the words must have been made with reference to the usage or custom that gives them that peculiar meaning if they are to be interpreted that way.

If you need contract advice Rollingsons has experienced lawyers who can help you; for more information please contact James Crighton via e-mail or by phone on 0207 611 4848.