It looks like in the future courts will decide what a contract means based on what an ordinary reader understands it to mean, rather than by following the traditional laws and rules of interpretation.
Article about interpretation
Malcolm Wallis recently wrote an article about how courts interpret contracts. How do courts determine what they mean? The abstract of the article reads as follows:
“This article explores the background to the decision in Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 4 SA 593 (SCA), some of its conceptual content and its broader implications for future jurisprudence in regard to the interpretation of documents. It illustrates the reality that in the past interpretation in different areas of the law was undertaken in accordance with differing standards even though all areas involved the interpretation of language in common everyday use, and questions the need to approach issues of interpretation in a way different from that used in conventional language. The internal inconsistencies of past authority are highlighted, as well as the trend in South African jurisprudence and overseas towards a single, simple and coherent approach to interpretation. The importance of recognising the role of both text and context is stressed, and the identification of relevant context in interpreting contracts and statutes is addressed. The article identifies two animating principles underlying the approach to interpretation in Endumeni, viz.: the discipline it imposes on judges to explain their decisions in regard to interpretation rather than starting with an a priori meaning and buttressing it with authority, and the desirability of a single, clear and simple standard by which to approach issues of interpretation”.
Natal Joint Municipal Pension Fund v Endumeni Municipality
You can read the actual judgment but the article explains the issues clearly.
What does an ordinary reader understand it to mean?
Malcolm Wallis is one of the best legal minds in South Africa and therefore it is important to take note of anything he says. Essentially he is suggesting that when a court is asked to work out what a contract means, the court should not necessarily use the traditional methods of interpretation of contracts (like, determining the intention of the parties), but rather courts should work out what an ordinary reader would understand a contract to mean.
Connection to plain legal language
This is very interesting in the context of the Consumer Protection Act that requires documents to be in plain language. Documents are in plain language if an ordinary consumer (reader) understands the document. So Malcolm Wallis’ view (and the approach that he suggests the courts follow) is aligned with the CPA.
Contracts must be written with the ordinary reader in mind
So, what does this mean for contracts?
It means that contracts must be written with the ordinary reader in mind, not a judge, lawyer or even the law. You should not draft a contract to take the traditional laws on the interpretation of contracts into account. I’m referring especially to all those clauses dealing with interpretation that you often find in contracts. A judge will probably not take that into consideration in the future. The judge will rather ask “What does an ordinary reader understand it to mean?”. So write contracts for an ordinary reader, make sure they can understand it. And if a dispute over its meaning ever gets to court, it will be easier for a judge to determine how an ordinary reader understands it.
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There are so many horrible contracts out there and this has got to change. Find out how we can help by reading about our plain language services.
