A Common Sense approach to business?
A recent Court of Appeal judgment dealing with the construction of contractual terms has recently been published. The Court held that the “business common sense” test should only be applied where there is a genuine ambiguity as to the meaning of the contract. If the terms are clear, then that is the construction which must be used, regardless of whether one or other of the parties believed that “common sense” would dictate a different meaning. The lesson here is that, when entering into a commercial contract, make sure that the contract is clearly drafted and that proper advice has been taken as to the meaning of key terms. This approach should hopefully help the parties to carry out their obligations without any dispute arising, however if the worst does happen a clearly drafted contract will enable your solicitor to provide quick and thorough advice as to your chances of success in court.