Contracting for ‘Contextualism’ – How can parties influence the interpretation method applied to their agreement?

Abstract

Since the High Court refusal of leave to appeal against the New South Wales Court of Appeal in Western Export Services Inc v Jireh International Pty Ltd (2011) 282 ALR 604, there has been much debate as to whether the identification of ambiguity is a pre-requisite to the admission of extrinsic evidence of surrounding circumstances and the commercial purpose of the contract in contract interpretation in Australia. And indeed, if it is, whether it should be. However, very little attention has been paid to the question of whether, and how, contracting parties might influence the interpretation method applied to their agreement. In her article, Catherine Mitchell argues how parties may use an entire agreement clause to evidence the parties’ intention that they do not wish for the background circumstances to be taken into account. This article considers the converse, that is, how the parties, at the time of drafting their contracts, may direct a court to look at context. It concludes that there are good reasons for directing the court to look at context and allows contracting parties to take control at a time when the interpretation rules are very uncertain.