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Contractual Interpretation

Commercial Law

“The minute you read something that you can’t understand, you can almost be sure that it was drawn up by a lawyer.”

– Will Rogers

This quote is a regrettable but somewhat accurate interpretation of the approach the legal profession has historically taken to the drafting of documents.

Fortunately of late there has been a significant push in the profession to have a “plain English” approach to drafting. This stems in part from the desire to make the legal profession more approachable, but also from the method the courts use to interpret contractual documents.

The base position for contractual interpretation is the “reasonable person” test. That is, if a reasonable person were to read this document, what would they think it means. If a person sees the word “witnesseth” in a contract they might not unreasonably think it means that someone spent too much money on lawyers.

If your contracts seem to be overly reliant on “Ye Olde English” it may well be that a reasonable person would not interpret it in the manner you think it should be interpreted. It may also be a sign that your contracts have not been updated or reviewed in some time and could be obsolete due to changes in the law.

If you think your contracts need updating, or if simply want to check that they comply with recent changes to the law, please feel free to contact our Commercial Law team on 02 9411 4466.