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Case law: Courts clarify when deletions in drafts can be used to interpret final contracts

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  • Publish date: 01 May 2016
  • Archived on: 02 May 2017

Parties to a contract should ensure it contains no ambiguities or they risk the courts looking at draft versions - including any deletions which indicate what the parties did not intend - to help decide what they did intend the contract to say.

Legal Alert

This update was published in Legal Alert - May 2016

Legal Alert is a monthly checklist from Atom Content Marketing highlighting new and pending laws, regulations, codes of practice and rulings that could have an impact on your business.

Words in a draft contract relating to a proposed individual voluntary arrangement (IVA) by a debtor were deleted and did not appear in the final version. The debtor argued that the final contract was ambiguous and the Court should use the deleted words in the draft as a guide to the parties' intentions.

In considering this argument, the Court of Appeal ruled that if the words of a final contract are different from draft versions, but there is no ambiguity in the final contract, the deletions in the draft are irrelevant. However, if they are ambiguous, the Court can look at the deletions to see what the parties clearly did not agree – as part of the process of deciding what they did agree.

Operative date

  • Now

Recommendations

  • Parties to a contract should ensure it contains no ambiguities, or risk the courts looking at draft versions, including any deletions which indicate what they did not intend, to help decide what the parties intended the contract to say.

Case ref: Narandas-Girdhar and Another v Bradstock [2016] EWCA Civ 88

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