7 Consideration and Interpretation Flashcards
Shadwell v Shadwell 1860
Benefit and detriment
Demonstrates how far the courts can stretch the concepts of benefit and detriment
Nephew’s marriage was seen as a detriment (legal detriment) and the monthly payment a benefit
Controversial
Ward v Byham 1956
Highlights the lengths the courts will go to to find consideration in private individuals
Father argued that the mother was only doing what she was legally bound to do by looking after the baby, and so there was no consideration
This was rejected
Williams v Roffey [1991]
Practical benefits
Where both parties benefit from an agreement, it is not necessary that both should suffer a detriment
Accepted and followed, but subject to criticism
Widens the understanding of what can be consideration
Mannai Investment Co Ltd v Eagle Star Assurance [1997]
Very controversial
Seen to be inappropriate to take a contextual approach to interpretation in a situation like this one, where there was no ambiguity in the words
Confirmed in Investors
Investor Compensation Scheme v West Bromwich Building Society 1998
In order to support the narrower and less literal reading of the contract, Lord Hoffman advanced five propositions
(1) Background knowledge available to the parties
(2) Matrix of facts
(3) Excludes previous negotiations and subjective intent
(4) Meaning is what the parties understood considering all background info
(5) ‘Natural and ordinary meaning of words’
Arnold v Britton 2015
Emphasised that the triggers for contextual interpretation should not be overly broad
appropriate for the courts to have a very broad discretion when engaged in the process of contextual interpretation – but this is an exception
literal interpretation should remain the rule
Supreme Court stressed the importance of not rushing into a contextual interpretation
Lord Neuberger set out seven factors for when contextual reading were appropriate which should be read as qualifications of the five principles set out in Investors
Employers’ Liability Trigger Litigation [2012]
Words and circumstances
Much greater scope for reasonable judges to disagree on what the parties’ agreement actually required them to do
The Supreme Court held that commercial purpose did matter for the question of how different wordings were to be interpreted
Procter and Gamble v Svenska Cellulosa Aktiebolaget (SCA) 2012
The threshold of contextual information
Do not disregard literal meaning
CoA relied on this principle to uphold a literal meaning on the clause
