By Dr. Chandana Jayalath
The whole idea of interpretation is to dig out the intention of the parties had in their minds at the time they entered into the contract. There are rules of interpretation that have been based on common sense connected with the ordinary life. It is the philosophy of language that provides material for interpretation. In contract law, it is now well-established that the context is important in interpreting documents, which is often referred to by the label ‘matrix of facts’, ‘surrounding circumstances’, or ‘factual background’. Courts must place itself in thought in the same position as the parties to the contract were placed, in fact, when they made it. Accordingly, those involved in contract interpretation should not try to make a bargain for the parties, but instead seek to understand what the parties meant by reference to the words which they chose. [Read more…]