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UK Syndicated Loans: Practical Experience in Interpreting UK Loan Documents

September 21, 2009

Keith Wilson and Norman Fraser

One of the fundamental principles of English law in relation to the interpretation of contracts is that the task of the court is to identify the intentions of the parties to the contract and apply an interpretation that is consistent with that intention. What had, to some extent, been thrown into doubt over recent years was the extent to which a court, in seeking to interpret a contract, was entitled to look at factual evidence outside the four square walls of the contract itself. Various decisions had suggested that, in order to establish the factual matrix, there may be cases where the court might look to evidence such as earlier drafts of documents illustrating by way of the changes between those drafts and the final signed version the intentions of one or both parties behind changes made and adopted. The House of Lords in England (which is the supreme court for civil matters in England) recently considered this case law in the case Chartbrook Ltd v Persimmon Homes Ltd & Others [2009] UKHL 38 (1 July 2009).

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