Clauses in a contract must be interpreted:

  • by having regard to the language used in the light of the ordinary rules of grammar and syntax;
  • in the context of the clauses being interpreted and the agreement as a whole; and
  • taking into account the apparent purpose of the clauses so as to give the contract a commercially sensible meaning.

If more than one meaning is possible, each possibility must be weighed in the light of these factors. It is an objective enquiry not a subjective enquiry.

We frequently repeat these rules because the so-called ‘golden rule’ is dead and context and purpose are equal considerations to ordinary meaning when interpreting a contract.

[Roazar CC v The Falls Supermarket]