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Charter Reinsurance Co Ltd v Fagan [1997] AC 313

Charter Reinsurance Co Ltd v Fagan [1997] AC 313


Citation:Charter Reinsurance Co Ltd v Fagan [1997] AC 313

Link to case on WorldLII.

Rule of thumb:How is any contract clause to be interpreted? The purpose of the clause must be looked at and then the term read, with the meaning worked. However, this does not take away from the key method that the clause should just be read and it interpreted to ascertain what the term says, and if the written term is so far from the purpose then the purpose can be ignored.

Judgment:

There is a balance to be had between giving effect to the intention of the clause to try to make the clause, and not paying too much attention to the exact wording, but not fully rewriting the clause – there is a natural meaning for a clause. The exact wording of the clauses must always be read extremely carefully, all the possible meanings of all the words ascertained, and what is the most natural meaning of what is written down stated, and the Court must refrain from overstepping its mark and rewriting a clause.

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Ratio-decidendi:

‘There comes a point at which the court should remind itself that … to force upon the words a meaning which they cannot fairly bear is to substitute for the bargain actually made one which the court believes could better have been made. This is an illegitimate role for a court’, Lord Mustill at 388

Warning: This is not professional legal advice. This is not professional legal education advice. Please obtain professional guidance before embarking on any legal course of action. This is just an interpretation of a Judgment by persons of legal insight & varying levels of legal specialism, experience & expertise. Please read the Judgment yourself and form your own interpretation of it with professional assistance.