Topic 1 : Proof and interpretation

Question 1

What is the aim of interpretation in contracts?

Answer 1

To give effect to the purpose expressed in those terms

Question 2

Distinguish between proof and interpretation.

Answer 2

Proof - prove the term exists in the contract. and then -
Interpretation - what those terms mean.

Question 3

Describe the parol evidence rule and the two legs.

Answer 3

Where the parties intended their agreement to be fully and finally embodied in writing, evidence that would contradict, vary, add or subtract from the terms in writing is inadmissible.
2 Legs
1. Integration - to what extent extrinsic evidence can be considered - determine content.
2. Interpretation - to what extent extrinsic evidence can be considered - to prove the meaning of the terms.

Question 4

What is interpretation as established in case law?

Answer 4

Process of attributing meaning to words.
Regards to the context by reading the document as a whole and the circumstances.
1. Language
2. Context
3. Purpose
4. Material for production
Objective process

Question 5

What are the two approaches to admissibility of evidence in interpretation? Explain each.

Answer 5

1. Traditional approach - set out in Coopers & Lybrand v Bryant. Unitary rather than step-by-step. Determines parties common intention through use of words, context and background. If not clear consider the surrounding circumstances. But difficult to distinguish between background and surrounding circumstances. Then we had KPMG v Securefin - abolished distinction. All factual evidence admissible but use conservatively.
2. Current approach - Considers a variety of factors. Unitary exercise

Question 6

What is the eiusdem generis rule?

Answer 6

Words with a general meaning used with words that have a specific meaning and indicates a class or genus, words in the general sense should be interpreted narrowly. Example lemon, oranges etc. Etc refers to citrus fruit.

Question 7

What is the expressio unius rule?

Answer 7

Reference made to specific subject, excludes all other subjects.

Question 8

What does it mean to interpret towards validity?

Answer 8

Will attribute meaning to make a term valid. Court does not want to destroy a bargain.

Question 9

What is the contra proferentem rule?

Answer 9

If you tried everything to interpret a term, the term will be interpreted against the one presenting it. Presented to debtor, creditor drafted it, thus will be interpret against the creditor, to advantage of the debtor.

Question 10

How do you interpret towards fair results? Refer to case law

Answer 10

SAFCOL (SA Forestry CoLtd v York Timbers - if there are. more than one meaning, the court will interpret to maintain good faith between the parties. The term in the SAFCOL case was ambiguous and York Timbers kept frustrating SAFCOL when they tried to increase the prices in fair manner. The court interpret in accordance to dictates of good faith and held that York Timbers were frustrating SAFCOL in exercising their rights.

Question 11

What are exemption clauses and how are they interpreted?

Answer 11

Clauses that limit or excluded one party’s liability to pay damages if other party gets injured. They are interpret restrictively and approached with caution. Refer to contra proferentem rule

Question 12

What section in the CPA refers to interpretation and what does it infer?

Answer 12

S4(4) - refers to contra proferentem rule and the limitation of exclusion of consumer rights is limited to the extent that reasonable person would elect taking into account - content of document
- manner and form presented
- circumstances