A 2005 Australian case has some useful observation about the use of dictionaries in contractual interpretation:

“Dictionaries are not a substitute for the determination of the interpretation and then construction of statutes and other documents.”

In House of Peace Pty Ltd v Bankstown City Council [2000] the court observed, in the context of the use of dictionaries in aid of statutory interpretation, that while dictionaries “can illustrate usage in context, [they] can never enter the particular interpretative task confronting a person required to construe a particular document for a particular purpose.”

Lord Steyn, too, has been critical of the use of dictionaries in contractual construction.  In Phillips and Stratton v Dorintal Insurance Ltd [1987] Lord Steyn observed:

“Words and phrases in contractual documents do not usually have one immutable meaning. Often there is more than one meaning available for selection. One cannot then simply turn to a dictionary for the answer. In choosing the appropriate meaning, the contextual scene is usually of paramount importance …”

Lord Steyn repeated this proposition in Arbuthnott v Fagan (Court of Appeal, 30 July 1993, unreported), observing “dictionaries never solve concrete problems of construction. The meaning of words cannot be ascertained divorced from their context.” In Investors Compensation Scheme Limited v West Bromwich Building Society [1998] Lord Hoffman emphasised the necessity to construe words in a contract by reference to their context, observing:

“The meaning which a document (or any other utterance) would convey to a reasonable person is not the same thing as the meaning of its word. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean. The background may not merely enable the reasonable person to choose between the possible meanings of words which are ambiguous but even (as occasionally happens in ordinary life) to conclude that the parties must, for whatever reason, have used the wrong words or syntax.”

Lasermax Engineering Pty Limited v QBE Insurance (Australia) Limited & 2 Ors [2005] NSWCA 66

Lasermax Engineering Pty Limited v QBE Insurance (Australia) Limited & 2 Ors – NSW Caselaw