Interpreting Contracts In English Law
For some time it had been orthodox to take an objective view of interpretation, best demonstrated by Smith v Hughes. Where Mr Smith thought, after testing a sample, he was buying old oats but in fact was buying green oats, he was not able to assert that he was unbound by his agreement. Blackburn J said:
| “ | If, whatever a man's real intention may be, he so conducts himself that a reasonable man would believe that he was assenting to the terms proposed by the other party, and that other party upon that belief enters into the contract with him, the man thus conducting himself would be equally bound as if he had intended to agree to the other party’s terms. | ” |
A remarkable example of the objective approach to interpreting a contract is found in Thake v Maurice. A couple were assured by a private doctor that Mr Thake's vasectomy would work. They were not explicitly informed there was a small risk of it not working. They had a healthy child. They sued Dr Maurice (and his clinic) for damages to pay for bringing up the child, arguing that his failure to properly perform the operation was a breach of contract which had resulted in great financial burden for them. But the Court of Appeal held that there was no entitlement to damages because a reasonable person knows that there is inherent risk in medical operations, and the chance it could go wrong (now compare Chester v Afshar in tort law). A reasonable person knows that people providing services contract to provide the service, but do not necessarily guarantee the outcome of the service will be fool proof.
- Proforce Recruit Ltd v The Rugby Group Ltd EWCA Civ 69
- Chartbrook Ltd v Persimmon Homes Ltd EWCA Civ 183
- Attorney General of Belize v Belize Telecom Ltd UKPC 11
Read more about Interpreting Contracts In English Law: Exclusion Clauses, See Also
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