case extracts 2

case extracts 2 - 47 I will now state the principles upon...

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47 I will now state the principles upon which I propose to act in deciding the proper construction of cl 9.1.8. The object of construing any contract is to discover the mutual intention of the parties in relation to the legal obligations each assumed by their chosen language: Pioneer Shipping Ltd v B T P Tioxide Ltd [1982] AC 724. This intention is not what the parties actually (that is subjectively) intended, but rather what is taken objectively to be their intention having regard to the language that they used, in the circumstances in which the contract was made: Reardon Smith Line Ltd v Hansen- Tangen [1976] 1 WLR 989; Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 . To ascertain that intention it is usually best to begin with the words the parties used and, at least when the parties are knowledgable, experienced and legally advised, to assume that they intended what they have said: Board of Trustees of the National Provident Fund v Shortland Securities Ltd [1996] 1 NZLR 45. Of course, it is always necessary to determine the meaning of the words used in the context in which they are used; that context being the whole contract and the circumstances surrounding the contract. If that approach produces an obviously absurd result, in some cases the absurdity may be avoided in favour of a sensible result: Torvald Klaveness A/S v Arni Maritime Corporation [1994] 1 WLR 1465. This is because the court will assume that the parties did not intend their bargain to bring about irrational consequences. However, a judge must be cautious when there is an attempt to sway a case by reference to commercial good sense, because views may
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This note was uploaded on 10/13/2008 for the course LW 242 taught by Professor Dean during the Three '08 term at Notre Dame AU.

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case extracts 2 - 47 I will now state the principles upon...

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