(c) Contractual guidelines on interpretation of the contract

Many contracts contain provisions that are fairly standard and abstract. These provisions are typically inserted either in Article 1 (on interpretation and definitions) or at the end of a contract, and either grouped under the header ‘miscellaneous’ or, in case of the ITC Model Contracts, in short contract Articles. As in other provisions, Anglo-Saxon contracts seem to elaborate more than in continental European legal systems.

This section addresses contractually stipulated guidelines that specify how certain references in a contract must be interpreted. Such guidelines are often inserted in a general Article containing the definitions.

“Written”. Many contract provisions require a notice to be given in writing. The obvious intention is to require that a party is firm and accurate as regards its intentions. A party who needs to notify an event of force majeure will prefer to do so informally rather than putting everyone on the side of the other party in a position where a formal response becomes inevitable (e.g. a firm and final warning with a deadline for remedy). In joint ventures, informal communications between the partners are the rule. A question that may arise is whether communications by e-mail or fax are considered to be in writing (and thus satisfy the criterion provided in a contract clause). In view of modern practice, it would be hard to argue that this is not the case, but avoiding any discussion of the matter may still be helpful:

A reference to a communication in writing shall be construed so as to include any communication in written form, whether by letter, fax, or a scanned and signed document sent by e-mail;

Article and section references. A meticulous contract drafter may refer to articles and sections of the agreement by adding to each such reference: of this Agreement or above or below, as the case may be, or hereof to each such reference. There might theoretically be confusion about whether a reference may unintentionally point to a provision outside the body of the agreement. To ensure ( … ) that this is only the case for non-capitalised references, include the following:

References to Articles, Sections, Annexes, and Schedules are references to articles or sections of, or annexes or schedules to this Agreement.

Headings and captions. A drafter may sometimes want to ensure that contractual provisions cannot be summarised in the two or three words of an Article heading or the caption immediately preceding a contract section. Although it is difficult to argue that one party misunderstood a contract clause because the caption or Article heading gave it a certain meaning, the following clause would diminish the possibility of such argument:

Headings in this Agreement and captions to its Sections are provided for convenience only and do not affect its meaning.

Applicable laws and regulations. When a party warrants that it is not in breach of a particular statute or undertakes to continue acting in compliance with a particular act or regulation, the other party may want to ensure that such non-breach or compliance is measured against that statute, act or regulation as in effect at the time in question. The following provision would allow a drafter to accomplish this without adding as amended or supplemented or from time to time after each reference to such a law or regulation:

Except as provided otherwise, a reference to a statute or regulation means that statute or regulation as amended or supplemented from time to time.

Times and time zones. In a multinational context it may be helpful to specify which time zone should be referenced in case the parties fail to identify it. For example:

Except as provided otherwise, a reference to a time of day is a reference to the time in Geneva, Switzerland.