Rules of contract interpretation: Latin but without limitation…

Found in: Blog

The purposes and objects to be secured by a contract and the circumstances surrounding the entry into a contract can be highly relevant to its interpretation. [1] That much is clear, but as a starting point one must examine and consider the meaning of the actual words that are used. In that regard, there are a number of lesser known textual rules which will affect how a contract is interpreted.

The meaning of a given word can be gathered from its associated words, or its textual context. This principle goes by the Latin phrase noscitur a socils. There are important sub-rules and related rules:

  • Ejustem generis - where two or more items which belong to the same group or class are followed by general words, the general words are interpreted as being limited to the same class. So, for example, bread would not come within the description of ‘meat, fish, vegetables and other provisions’. Here we have a description of a class of natural products and, because bread is a manufactured item, it falls outside of the class. [2]
  • Copulatio verborum indicat acceptationem in eodem sensu - the linking of words indicates that they should be used in the same sense. That is, a court should not give one word in a related list of words a meaning that would be inconsistent with the adjoining words. The court can also look at how the same words are used elsewhere in the contract to obtain guidance as to its meaning in a given clause.
  • Expressio unis est exlusio alterius - the express mention of one is to the exclusion of the other. So, when a list is included, other things not listed are excluded. For example, if a statute grants jurisdiction over certain things, that would exclude jurisdiction over other things.
  • Expressum facit cessare tactitum - if express provision has been made in respect of a topic, implication on the topic is precluded. For example, contractual terms specifying a procedure to be followed imply that the same matter will not be dealt with under a different procedure. 
  • Generalia specialibus non derogant - where there is a conflict between general and specific provisions, the specific provisions prevail.
  • Contemporanea expositio - the meaning of words in a document are to be understood with the meaning they bore at the time of the document.

Such rules can be excluded expressly by the language of the contract, or impliedly. So, for example, to overcome issues with the application of the ejustem generis principle, the draftsperson could start with general words first and introduce specifics with a phrase such as “including without limitation”. This may drive the plain English proponents red in the face because, they will say, “including” already imports “is not limited to”. That might be so, but the inclusion of such words will help deter a court from applying ejustem generis. If still troubled by the legalise, the draftsperson could just say “including, for example…”

This also explains why lawyers like expansionary phrases such as “of whatever kind”, “howsoever arising” and “in connection with”.

Simplicity and precision in drafting is key. However, nuanced considerations are often involved are should not be overlooked in the interests of expediency.

FOOTNOTES

[1] See Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640, as applied in Rinehart & Anor v Hancock Prospecting Pty Ltd & Ors [2019] HCA 13.

[2] Hy Whittle Ltd v Stalybridge Corporation (1967) 65 LGR (UK) 344.

Dean Grondal – Principal, GRONDAL BRUINING

Ph: +61 8 6500 4320

Email: dean.grondal@grondalbruining.com.au 

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