Commercial Contracts

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Commercial contracts

Commercial (and indeed other forms of) contract can rise to problems and dispute.

Some of the questions to be considered are:

• Who are the parties?
• Has consideration (or value) been provided?
• What does the contract actually mean?
• What obligations and duties does it impose?  Can its express terms be supplemented by implied terms?  Can terms be implied by trade custom? Does any statute impose other requirements?
• What is the impact of an entire contract clause?
• What is the law that governs it and is there a jurisdiction clause?
• Are all the clauses enforceable or would a Court rule some penal?
• Has one party breached its terms and if so what remedies are available to the other party?

… and so on.  What a lawyer’s paradise!!!

The starting point is always the document itself.  Courts have many times grappled with how to construe a document and whether outside evidence can be produced in so doing.  The test is objective, namely what would the reasonable person believe the contract was intended to mean?  Generally words are given their natural meaning but in specialised sectors trade custom or market practice may be considered.  The Judge can look at the background leading to the document being signed but post contract events are inadmissible as are documents evidencing the negotiations leading to the contract (such as drafts and emails).

The Judge may also be faced with an application for rectification.  Such claims are not easy because the burden of proof is heavy.  The applicant needs to prove that all the parties agreed something else to what is in the signed document.  However in this situation the Court can look at a wider range of evidence including earlier drafts and negotiating communications.

The Court can also be asked to imply terms into the contract based on commercial sense and other terms may be deemed incorporated by statute (such as duties imposed by consumer legislation) a clause which expressly states that the contract contains all the agreed terms – an entire contract clause – needs to be construed carefully to see the ambit of its exclusion and cannot defeat a legitimate claim for fraud or misrepresentation.

The rules of evidence can be baffling but we at GSC have advised for years as to the meaning of contracts and how to deal with any dispute.  It impacts not just on our litigation department but effects every single area on which we advise.  Therefore we can guide you through the process.

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Have a question?

For every part of your life and business, talk to GSC

GSC Solicitors LLP
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+44(0)20 7822 2222
hello@gscsolicitors.com