Before you charge in - part 8. Say what you really mean: the importance of making your intentions clear in commercial contracts

Disputes between parties regarding a written agreement almost always involve disagreements about the meaning and effect of particular contractual terms. These disputes can be an expensive way for the parties to find out who is right. Ask Chartbrook Limited and Persimmon Homes. A recent dispute between them relating to the construction of the terms of a contract went all the way to the House of Lords (as it then was). The difference between the parties' interpretation was £3.5 million. The addition of five words to the provision in question would have avoided the problem, saving significant legal costs and wasted management time.

In this the eighth part of our "before you charge in" series, we look at how courts decide disputes between parties about the meaning and effect of particular contractual terms; the options available to a party if a dispute arises in relation to existing contractual provisions; and key points a party should consider at the drafting stage when entering into a new agreement.