Contract Interpretation

December 11th, 2017

The contract in Dynniq UK Ltd v Lancashire County Council (2017) EWHC 3173 (TCC) concerns the maintenance of traffic signal installations and associated equipment, and the construction of new or replacement traffic signal installations and equipment, in Lancashire.  The parties were in dispute as to the proper interpretation of the contract.

Coulson J stated:-

“10.      The rules of construction are now well-known: there has been a plethora of cases in the House of Lords and the Supreme Court in recent years in which the relevant rules have been repeatedly set out, including Chartbrook Limited v Persimmon Homes Limited [2009] UKHL 38; Rainy Sky SA v Kookmin Bank [2011] UKSC 50; Arnold v Britton [2015] UKSC 36; and Woods v Capita Insurance Service Limited [2017] UKSC 24. As I have pointed out elsewhere, some practitioners and legal commentators, with nothing better to do, have sought to exploit certain fine linguistic differences between the various judgments in those cases but, in my view, they all point in the same general direction. What matters is the objective meaning of the language used, to be derived from the natural usual meaning of the words in the contract, when seen against the background/context of the contract. Where there are rival interpretations, one test is to consider which interpretation is more consistent with business common sense.”

“12.      … It is a well-established principle that the court should endeavour to give effect to all parts of the contract and to treat no part of it as inoperative or surplus: …”

“31.      … There is no lack of clarity in the words, and the bespoke amendments will (if there is a clash, which I doubt) take precedence over the standard form of the Method of Measurement …”

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