Interpretation of Contract

February 26th, 2018 by James Goudie KC

Amey Birmingham Highways v Birmingham City Council (2018) EWCA Civ 264 concerned a local authority’s PFI highway maintenance contract. The contract was intended to run for 25 years.  It was a “relational contract”.  At paragraph 93, Jackson LJ, with whom Moylan LJ and Sir Stephen Tomlinson agreed, observed that: “Any relational contract of this character is likely to be of massive length, containing many infelicities and oddities.  Both parties should adopt a reasonable approach in accordance with what is obviously the long-term purpose of the contract.  They should not be latching onto the infelicities and oddities, in order to disrupt the project and maximise their own gain”.

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