Understanding what each party intended

The importance of clear drafting in documentation

The background

Jones & another v Oven & another [2017] concerned a Transfer between the claimants and the defendants’ predecessors in title. The terms of the Transfer were complex, but in summary if a barn on the land transferred was demolished by the defendants’ predecessors in title, a strip of land was to be transferred back to the claimants.

The barn was subsequently demolished by the defendants, and it became unclear whether the Transfer back to the claimants should contain restrictive covenants which had been outlined in the original Transfer, prohibiting certain uses of the land.

The decision

The court held that the restrictive covenants did affect the strip of land, and that the land must be transferred as set out by the original Transfer.

In reviewing the drafting of the Transfer, the court held that certain aspects of it could not make commercial sense; this seems to go against the industry-leading case of Arnold v Britton, whereby the parties’ intended meaning took precedence above commercial common sense.

Advice and action for landlords

At the heart of this case is the need for clear and unambiguous drafting in any commercial contract, whether a Transfer, lease or other document. It is costly to engage in litigation, particularly where parties face the uncertainty of relying on interpretation arguments.

In this case, the court implied ‘common business sense’ terms which is no doubt of comfort to landlords, but nevertheless the court did not entirely follow the Arnold v Britton decision which placed the parties’ intentions above what seemed to make commercial sense. Ultimately, it is for those entering into agreements to ensure that all intended outcomes are communicated clearly.