We know that clients are grappling with contractual issues arising from the impacts of the COVID-19 pandemic and the rights and obligations under existing contracts are coming under close scrutiny and it is likely that there will be disputes about the correct interpretation of contractual provisions. To assist, we have set out a brief refresher of the current law on interpretation, and distilled down some key factors which will be relevant if the courts are asked to decide what is meant by a particular contractual provision.

Where does the law stand today?

Very broadly, the English courts will construe a contractual provision objectively and will be keen to ensure that they are not interfering with the bargain struck by commercial parties. The principal authorities are set out in the footnote below. When considering the key principles or ‘tools’ of interpretation, the Supreme Court in Wood made clear that the extent to which each tool will assist the court to ascertain the objective meaning will vary according to the circumstances of the particular agreement(s).