Solicitors can sometimes be asked to advise on contracts that are poorly drafted. This can be where businesspeople draft their own contract to document a deal then something goes astray on the deal and the contract is sent to the solicitor either to interpret or resolve.
The standard rule in contract law is that the contract is interpreted against the party that drafted it, but this does not cover every situation.
Where the solicitor cannot fix the contract to the satisfaction of both parties it then falls to the court to interpret what the parties had agreed to.
The Irish courts have had in the past cases where the judges had to resolve some badly constructed contracts. Surprisingly, some old case law is still regarded as setting out principles to be followed. Such is the case in the very old case of The Moorcock [1889] 14 PD 64 which stated:
“…the law is raising an implication from the presumed intention of the parties with the object of giving to the transaction such efficacy as both parties must have intended that at all events it should have.”
Here the court is interpreting what the ‘presumed’ intentions of the parties were when making the contract. So, in effect, the court will imply a term into the contract to make sense of the contract and the intentions of the parties. These are known as Implied Terms.
A more recent case appears to take a harsher view on badly drafted contracts as in the case of Tradax (Ireland) v Irish Grain Board Ltd [1984] I.L.R.M. 471 where the judge said:
“It is not the function of the court to write a contract for parties set upon commercially equal terms; if such parties want to enter into unreasonable, unfair or even disastrous contracts, that is their business, not the business of the Courts.”
That’s like being abandoned by the courts! But most judges will seek to find and give effect to the intention of the parties by inserting an implied term.
So, the lesson here is always ask your solicitor for advice when commercially engaging with others to ensure that the proper intentions of the parties are included, and all the terms are set out and most important of all, the contract is properly executed where companies are involved.
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