Carter and Courtney, ‘Unexpressed Intention and Contract Construction’

Abstract:
Many contract disputes concern issues of unexpressed intention: the express terms of the contract do not directly answer the particular question raised by the circumstances.  In this article we argue that there are different bases for resolving such issues in the law of contract and we present a hierarchical framework for understanding their interaction. ‘Construction’ plays an important role, but it becomes clear that construction is not a homogeneous process. Rather, it performs different functions in relation to the different bases. These functions include: to apply contract doctrine, to rebut presumptions of intention, and the interpretative function. Using this framework, we critique the controversial views of Lord Hoffmann in Attorney General of Belize v Belize Telecom Ltd (on terms implied in fact) and Transfield Shipping Inc v Mercator Shipping Inc (The Achilleas) (on the first limb of Hadley v Baxendale). In both cases, Lord Hoffmann assigned construction a role different from that which it has conventionally been understood to perform.

JW Carter and Wayne Courtney, Unexpressed Intention and Contract Construction, Oxford Journal of Legal Studies Volume 37 Issue 2 Summer 2017.

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