The Supreme Court of Appeal has yet again reaffirmed the principles dealing with the interpretation of contracts. Interpretation of contracts is a unitary exercise which starts with the text to be interpreted and considers it within the contract as a whole, and in context. It requires consideration of text, context and purpose of the contract.
The considerations include the nature, formality and quality of the drafting of the contract.
The words in a document must not be considered in isolation. The words have to be interpreted sensibly and not have an un-business-like result.
We make no excuse for repeatedly drawing attention to the modern method of interpreting contracts because for so many years we relied on the plain meaning of the language and we need a constant reminder of the new approach.
The case is Theron v Premier, Western Cape.