Interpretation of Contract Flashcards
What is the parol evidence rule in contract law?
A principle prioritising written contracts over oral evidence to determine a contract’s terms, ensuring the integrity of written agreements.
What does the exclusion of secondary evidence for document content entail under the parol evidence rule?
It prohibits proving the contents of a written document by any means other than the document itself.
How does the parol evidence rule treat extrinsic evidence regarding written terms?
Written contracts are conclusive, and extrinsic evidence cannot modify, contradict, or add to their terms.
When is extrinsic evidence admissible under the parol evidence rule?
Extrinsic evidence is admissible for interpreting or constructing the terms of the document, except for altering written terms.
What does the Law Commission’s 1976 report suggest about the parol evidence rule?
It suggested abolishing the rule due to its numerous exceptions that undermine its efficacy.
Which case is a landmark in illustrating the parol evidence rule’s application and its exceptions?
Jacobs v Batavia & General Plantations Trust Ltd (1924), highlighting the rule’s essence and exceptions like collateral contracts and rectification.
Under what circumstances can the presumption that a written contract encapsulates the entire agreement be challenged?
The presumption can be challenged in cases of fraud or the existence of a collateral contract.
How have judicial attitudes shifted in interpreting contract terms over the decades?
From a literal approach favoring the “four corners” of the document to a more contextual interpretation considering the contract’s commercial context and formation circumstances.(Today back to a more literal - restraint interpretation)
What cases marked the shift towards contextual interpretation in contract law?(Literal to interpretive)
Prenn v Simmonds (1971) and Reardon Smith Line Ltd v Yngvar Hansen-Tangen (1976) by Lord Wilberforce, emphasizing the importance of the contract’s commercial context.
What 5 principles did Lord Hoffmann outline for contract interpretation in Investors Compensation Scheme v West Bromwich?
a. Contextual approach to interpretation
b. Wide scope of background knowledge
c. Pre-contractual negotiations are inadmissible
d. Substitution of words and syntax
e. Business common sense
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How do recent cases like Rainy Sky SA v Kookmin Bank (2011) reflect the Supreme Court’s approach to contract interpretation?
They illustrate a nuanced balance between textualism and contextualism, emphasizing adherence to contract language while considering the broader commercial context and parties’ intentions.
What is the significance of the parol evidence rule in modern contract law?
It upholds the primacy of written agreements while allowing flexible interpretation that considers the contract’s context, purpose, and parties’ intentions, ensuring fairness and integrity.
