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  • The High Court of Australia has followed established authority in holding that an ambiguous provision in a commercial contract should be construed by having regard to the commercial purpose of the contract.
  • The commercial purpose is to be found by considering the content of the contract and the factual background to the making of the contract.

Many lawyers use standard form contracts for a wide range of transactions. Standard form contracts can help to promote consistency between contracts and give parties confidence that their contracts reflect established industry practice. The use of standard form contracts can also help lawyers and clients to save time and money.

However, standard form contracts are not immune to potential interpretive problems, including ambiguous drafting. A recent High Court decision, Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd [2017] HCA 12 (‘Ecosse’), shows how standard form contracts, like other kinds of contracts, should be interpreted when ambiguity arises.

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