City Alliance Ltd v Oxford Forecasting Services Ltd: CA 16 Nov 2000

The parties disputed the construction of a clause in the contract between them.
Held: Chadwick LJ said: ‘It is not for party who relies upon the words actually used to establish that those words effect a sensible commercial purpose. It should be assumed, as a starting point, that the parties understood the purpose which was effected by the words they used; and that they used those words because, to them, that was a sensible commercial purpose. Before the Court can introduce words which the parties have not used, it is necessary to be satisfied (i) that the words actually used produce a result which is so commercially nonsensical that the parties could not have intended it, and (ii) that they did intend some other commercial purpose which can be identified with confidence. If, and only if, those two conditions are satisfied, is it open to the court to introduce words which the parties have not used in order to construe the agreement. It is then permissible to do so because, if those conditions are satisfied, the additional words give to the agreement or clause the meaning which the parties must have intended. ‘
Sir Andrew Morritt VC, Chadwick, Latham LJJ
[2000] EWCA Civ 510, [2001] 1 All ER Comm 233
Bailii
England and Wales
Cited by:
CitedHammonds (A Firm) v Danilunas and others ChD 13-Feb-2009
The claimant firm of solicitors sought repayment of sums which it said were excess drawing from the defendants, former partners. Drawings had been taken against anticipated profits, and the retiring partners left as profits declined. The defendants . .
CitedPink Floyd Music Ltd and Another v EMI Records Ltd CA 14-Dec-2010
The defendant appealed against an order made on the claimant’s assertion that there were due to it substantial underpayments of royalties over many years. The issues were as to the construction of licensing agreements particularly in the context of . .
CitedCampbell v Daejan Properties Ltd CA 20-Nov-2012
The tenant appealed against an order requiring the amendment of what was found to be an obvious error in the lease as to the responsibility of the lessor to make repairs to certain walls and rooves, and the apportionment of liability for payment of . .
ApprovedLediaev v Vallen CA 5-Mar-2009
. .
CitedPink Floyd Music Ltd and Another v EMI Records Ltd CA 14-Dec-2010
The defendant appealed against an order made on the claimant’s assertion that there were due to it substantial underpayments of royalties over many years. The issues were as to the construction of licensing agreements particularly in the context of . .

These lists may be incomplete.
Updated: 05 March 2021; Ref: scu.430471