Correspondence preceding a contract could be looked at to determine the circumstances in which a provision in the contract was intended to apply.
Lord President Hope said: ‘In my opinion the issue which has arisen between the parties in this case requires that reference should be made to the previous correspondence in order to resolve it. This is because the essential point which is in dispute is not the meaning of the words and phrases used in the . . agreement but the circumstances in which it was intended to apply. The ordinary rules for the construction of written documents, including contracts such as that entered into in the present case, exclude reference to extrinsic evidence, unless there is an ambiguity in the words used which requires to be resolved by the use of such evidence. . But . . it is legitimate to look to the surrounding circumstances and see what was the intention of the parties, expressed in the words used, as they were with regard to the particular circumstances and facts with regard to which they were used . . We were referred by the pursuers’ counsel to a number of cases where it was recognised that extrinsic evidence was admissible to identify something mentioned in the contract, such as a person, thing or document referred to in it . . The purpose of such evidence is not to modify the contract but to apply it to the facts as explained by the extrinsic evidence.’
Judges:
Lord President Hope
Citations:
1994 SC 351
Cited by:
Appeal from – Bovis Construction (Scotland) Ltd v Whatlings Construction Ltd HL 19-Oct-1995
The managing contractors sought damages from a sub-contractor. The contract was on a printed form and in letters. A letter limited time related damages to pounds 100,000. The main contractors sought a much larger sum.
Held: A clause seeking to . .
Lists of cited by and citing cases may be incomplete.
Scotland, Contract
Updated: 05 May 2022; Ref: scu.381292