ABSTRACT
This study uses a doctrinal analysis of case law to examine whether there is hierarchy of approaches when interpreting commercial contracts in English courts. Using cases from Prenn v Simmonds to Wood v Capita, it shows how the latter has become the latest authority on commercial contractual construction. The study finds that Wood v Capita is a nexus between Rainy Sky and Arnold v Britton, two cases that years of jurisprudence found to offer competing approaches to interpretation. The Court emphasizes that these two cases say the same thing and that construction is both a unitary and iterative process. This refutes the hypothesis that a hierarchy of approaches exists.
While the Court’s attempt at complementarity in Wood v Capita has brought legitimacy to the divergent approaches to construction, this had not made the process any more transparent or objective. This has been compounded by the findings of Sara & Hossein Asset Holdings Ltd v Blacks Outdoor Retail Ltd, a case predicated on Wood v Capita. This case shows that where there are rival meanings, the court can reject the alternatives proposed by the parties and insert its own, as long as the contractual context supports this alternative. This usage of the Court’s power and the persistent dissent across cases suggest that cases involving the interpretation of commercial contracts will continue to be litigated, with the Supreme Court called upon to provide greater clarity on what we mean by construction and how it should take place.
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Felicia A Grey, Contractual Clarity, Context and Commercial Common Sense: Is There a Hierarchy of Approaches under English Law? (2025) 46(2) Business Law Review 32-44.
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