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A Contract in Context, Means more than mere words can express...

Updated: Sep 30, 2023

I believe a true and correct meaning of words used in contract can be ascertained by anyone, who seeks to truly understand and observe its terms, with diligent application of the basic Principals of Contractual interpretation.

The meanings of mere words

In isolation, words, even phrases usually bear only their plain and ordinary meaning in their most common everyday usage. The common meaning we have become familiar with is not

discarded easily.

In the context of a specific contractual undertaking in a specific industry with specific trade practices, those same words plain meanings can be reshaped into something quite different from the ordinarily familiar.

Understanding a part of a contract in context means reading the whole contract, giving common sense meaning to all its parts. Consider the background facts within which the contract arose.

Allow words to narrow or broaden their meaning to fit the context within which they relate to other clauses.

Sometimes the words used are wrong

When it is clear the objective understanding of the common intentions of the parties are not served by the words expressed in the terms, then to give proper effect to the contract;

[1] When words are missing, terms can be implied or added in;

[2] When words are obviously incorrect, they can be rectified;

[3] When words properly expressed come into conflict with the subsequent actions of the parties, that evidence their common intentions, those express terms are to be displaced by the meaning conveyed by the actions of the parties IF it would be unjust to revert the contract interpretation back to the express terms.

Practice the Art, to Deliver Better, Clearer, Fairer Outcomes for your Clients

The art of competent contractual interpretation is easily attainable with a little self guided learning. A little learning can go a long way to improving the outcomes of every project we undertake. Aid earlier, better business decision making that drives a more efficient industry. With an interpretation specialist skills, you can give your new claims a due diligence test to avoid embarrassing yourself and annoying your client. When a new claim passes its due diligence test, improved claim presentation will make it easier for the recipient to understand, agree with and pay promptly.

By Matthew Ensoll

Life Member NZIQS. Reg.QS.

Editor New Zealand Building Economist.


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