Presumptions are aids for obtaining clarity when reading and applying the terms of written contracts. They originate from what is known to happen in the ordinary course, and generally promote outcomes that are fair and reasonable. As contracts often leave things unsaid, presumptions help to close gaps. Presumptions apply in the absence of compelling considerations indicating that they should not apply in a specific case.
These are the six most important presumptions relied upon when contracts are interpreted. They underline the importance of clear, careful and thoughtful drafting whenever an agreement is reduced to writing.
1. Words used in contracts, are used in their normal, ordinary sense
This includes a presumption that, where the parties are involved in a specific business or trade, the words used in their contract are used in the sense usually understood in that business or trade.
The exceptions will be when the context makes it…
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