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    A Contract Is What it Says

    When you enter into a contract, you are agreeing to be bound by what it says, not by what you think it means. Only rarely, such as when the meaning would make no commercial sense, will the court substitute its own view of the meaning of the contract if the meaning can be divined from the contract itself.

    It is therefore important to make sure the wording of the contract's terms is tightly drafted so that arguments over the meaning of clauses do not arise.

    Recently, a dispute arose over a contract as to the meaning of the word 'default' with regard to the payment of compensation. Did it mean any failure to fulfil the terms of the contract, or did it mean any wilful or deliberate failure to fulfil the terms of the contract?

    The answer was easy: the generally accepted meaning of the word applied, not the narrower interpretation that included only wilful or deliberate failure. If that was the meaning one party wished to include, they should have negotiated to put that in the document.

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    If you are negotiating a contract, it is important to give careful consideration to the meaning of the clauses in it, so that the contract you sign means what you think it means. We can assist you in achieving this aim.

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    The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.