find the latest legal job
Senior Associate - Competition, Policy & Regulatory
Category: Other | Location: Sydney CBD, Inner West & Eastern Suburbs Sydney NSW
· Work with a well regarded Partner · Sydney CBD
View details
Commercial Litigation Senior Associate
Category: Litigation and Dispute Resolution | Location: Sydney CBD, Inner West & Eastern Suburbs Sydney NSW
· Lawyers Weekly Australia Partner of the Year 2016, Insolvency
View details
MULTIPLEX Regional Legal Counsel (Vic) | 7 to 10 years + PQE
Category: Generalists - In House | Location: Melbourne CBD & Inner Suburbs Melbourne VIC
· Career defining in-house role · Tier One international contractor
View details
Junior Lawyer - Personal Injury Law
Category: Personal Injury Law | Location: Parramatta & Western Suburbs Sydney NSW
· Highly specialized practice · Challenging role with great opportunities
View details
IR Advisor/Member Advocate
Category: Industrial Relations and Employment Law | Location: St Leonards NSW 2065
· Permanent (0.8-1.0 FTE) role in a developing team
View details
Trafficking words in today’s contract

Trafficking words in today’s contract

AS THE trend in the interpretation of contracts has changed from a textual to contextual basis over time, the impact on cost and certainty, among other factors has been significant, according to…

AS THE trend in the interpretation of contracts has changed from a textual to contextual basis over time, the impact on cost and certainty, among other factors has been significant, according to the NSW Chief Justice.

“Law is a fashion industry,” Chief Justice James Spigelman said in a speech on the contemporary interpretation of contracts at Clayton Utz’s ‘risky business’ conference in Sydney. “Over the last two or three decades the fashion in interpretation has changed from textualism to contextualism.”

According Justice Spigelman, “all lawyers, both practitioners and judges, are traffickers in words”. He said he recognised the days of literal interpretation are no longer in vogue, while purposive interpretation is now all the rage.

The changing trend is not exclusive to contracts either, the judge said. “In constitutional, statutory and contractual interpretation there does appear to have been a paradigm shift from text to context.

“Ideas which have found their origin in statutory interpretation have come to be applied in the interpretation of contracts ... Such convergence in approach also reflects changes in the broader intellectual milieu.”

One casualty of the shift in interpretation could have been commercial certainty, Justice Spigelman said.

“A significant concern is whether the change in the general style of contractual interpretation — from text to context — has undermined the desirable objective of ensuring commercial certainty.

“There is a real question whether the expanded scope of matters to which consideration can be given in the course of interpretation has so decreased the capacity of all relevant parties to rely on the words as to raise the level of uncertainty about the obligation to deliver the relevant bucket of money or of monies worth.”

Justice Spigelman said a major purpose of both commercial agreements and contract law as a whole is the allocation of risk between parties, often involving contingencies that cannot be anticipated. “Interpretation is the necessary means of determining how those risks were in fact allocated. Anything which increases the level of uncertainty about how words have performed that task, itself increases risk,” he said.

Apart from potential problems with certainty, the NSW chief justice also drew attention to the significant increase in the cost of legal dispute resolution that has resulted from an expanded scope of matters to be considered in the course of present day interpretation.

Justice Spigelman referred to the “particularly influential formulation” that Lord Hoffmann’s five-point scheme for contractual interpretation represents in the Investors Compensation Scheme case, including Lord Wilberforce’s ‘factual matrix’.

“The first step by Lord Wilberforce — taking into account the “factual matrix” — unquestionably expanded to a substantial degree the costs of litigation,” he said.

Justice Spigelman recalled the view of former English judge Sir Christopher Straughton, who said “of Lord Hoffmann’s ‘absolutely everything’ dictum, ‘it is hard to imagine a ruling more calculated to perpetuate the vast cost of commercial litigation’”.

Like this story? Read more:

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

The legal budget breakdown 2017

Trafficking words in today’s contract
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
Silk picked to monitor national security laws
Dr James Renwick SC has been appointed as Independent National Security Legislation Monitor after se...
Two businessman, growth
Sep 19 2017
Aus catching up on international arbitration front
Australia is starting to see a spike in international arbitration with this set to continue over the...
Sep 19 2017
Manson family killer suffered ‘miscarriage of justice’: former lawyer
A retired Australian barrister has published a book on the Manson Family murders of 1969 and called ...
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...