INTERPRETING A 'POORLY DRAFTED' CONTRACT TERM

In Multi-Link Leisure Developments v North Lanarkshire Council [2010] UKSC 47, [2011] 1 All ER 175 the Supreme Court took a robust approach to the interpretation of the contract between the parties and placed heavy emphasis upon the importance of adopting a construction which was consistent with commercial good sense. The court also stated that, in a case where the contract is poorly drafted, the imperative to give the words their ordinary and natural meaning is less strong than in the case where the contract is well drafted. In the case where the parties have chosen their words carefully, an approach which gives to the words their ordinary and natural meaning is likely to further their intention. This is less obviously so where the contract is poorly drafted and, in such a case, a court may be more inclined to depart from the ordinary and natural meaning of the words in favour of an approach which produces a commercially sensible outcome.

The facts

A contract of lease contained an option which entitled the tenant, Multi-Link, to purchase the land during the currency of the lease. The dispute between the parties concerned the price that was to be paid on the exercise of the option. The disputed clause provided as follows: