Purposive Contractual Interpretation

Abstract

It is now well recognised that contractual purposes play an important role in the construction of contracts. The methods by which purposes are taken into account have not, however, been systematically explored. This article considers three central issues in the purposive construction of contracts: first, the reasons contractual purposes are relevant to the interpretation of express terms and the identification of implied terms; secondly, the way in which contractual purposes are identified and distinguished from individual party interests; and, thirdly, the different ways in which contractual purposes inform the processes of interpretation and implication. It is argued that reference to contractual purposes can both raise and resolve interpretive choices, and that purposive construction plays a significant and under-recognised role in the identification of implied terms. At various points connections are made between the purposive interpretation of contracts and purposive statutory interpretation.