Shona Coffer
Thomson Reuters
10 July 2015

Interpretation of contracts: it does what it says on the tin

The recent judgment of the Supreme Court in Arnold v Britton has slipped under the radar for many lawyers. However, it marks an interesting and potentially significant move away from “commercial common sense” as the touchstone of contractual construction. The Supreme Court concluded that arguments based on commercial common sense “should not undervalue the importance of the language of the provision which is being construed”.

The decision was applied this week by the Commercial Court in Laird Resources LLP v Alumm Holdings Ltd (unreported). Applying Arnold v Britton, Mr Justice Flaux emphasised that the purpose of interpretation is to identify what was agreed and not what the court thinks should have been agreed.

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