It looks like in 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. Malcolm Wallis recently wrote an article about how courts interpret contracts. How they determine what they mean. The abstract of the article reads as follows:

The article explores the current approach to contractual interpretation and contrasts it with the way ordinary readers understand documents. It suggests that the focus on a search for the intention of the parties is an unrealistic exercise that disguises what courts actually do when construing written contracts. It advocates an acceptance of an objective approach to interpretation of contracts based on the reasonable reader’s approach to the wording of the contract and suggests that this helps to remove the mystique with which lawyers surround the task of interpretation.

Malcolm Wallis, What’s in a word? Interpretation through the eyes of ordinary readers, South African Law Journal, Volume 127, Number 4, 2010, 673.

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.

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.

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.