A recent UK case made the following point regarding interpretation of contracts based on hypothetical, extreme examples:

‘There was also, as there sometimes is in commercial cases that turn on points of interpretation, the temptation to provide illustrations of ‘commercial sense’ by the use of hypothetical, and occasionally extreme, examples of what any particular interpretation of the relevant terms could potentially mean in practice. Illustrations of the (unlikely) extreme examples of any particular competing interpretation are not helpful. Viewing matters with hindsight is not particularly helpful either. One party may have agreed to something in a contract which, with hindsight, he, she or it may have wished had not been agreed. The fact that events occurred that lead either to unforeseen consequences, or to what one party considers an uncommercial outcome, is not of direct assistance.’

[The case is Haberdashers’ Aske’s Federation Trust Limited V Lakehouse Contracts Limited & Others]