Contractual interpretation

Laundy Hotels v Dyco Hotels [2023] HCA 6

This recent case on the legal effect of pandemic restrictions in default situation is important because a full bench of the High Court repeats (at [27]) the basic principles of contractual interpretation –

“It is well established that the terms of a commercial contract are to be understood objectively, by what a reasonable businessperson would have understood them to mean, rather than by reference to the subjectively stated intentions of the parties to the contract. In a practical sense, this requires that the reasonable businessperson be placed in the position of the parties. It is from that perspective that the court considers the circumstances surrounding the contract and the commercial purpose and objects to be achieved by it”9.

This principle is from Episode 96 of interpretation NOW!


9 Ecosse [2017] HCA 12 (at [16]), Woodside [2014] HCA 7 (at [35]).