Investors Compensation Scheme Ltd v West Bromwich Building Society
[1998] 1 WLR 896
Ratio Decidendi
Contractual interpretation is an objective exercise ascertaining the meaning a reasonable person with all the background knowledge available to the parties would give to the language used. The background includes anything that would have affected the way the language would have been understood by a reasonable man, but excludes prior negotiations and declarations of subjective intent.
Hechos
Investors assigned claims against their financial advisers to the ICS. A dispute arose over the scope of the assignment clause.
Resumen de la sentencia
Lord Hoffmann restated the principles of contractual interpretation in five propositions, emphasising the objective approach and the importance of background context (the 'matrix of fact').
Citas clave
"Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties."
— Lord Hoffmann
Tratamiento posterior
The leading restatement of interpretation principles, refined in Rainy Sky v Kookmin Bank and Arnold v Britton.