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Colloquialism Of Contracts: The Ingenuity Of Inscribing Contracts

Contracts form the backbone of most professional relationships. Contracts were in existence way before they were understood for what they are today. The ever-evolving principles of essentials of a contract comprises of drafting and language of the many other things. Language with its structure and meaning facilitate better interpretation of contracts. Its only when contracts are drafted well can the true essence of the legally binding agreement can come into picture.

This paper aims at elaborating on few statutes of interpretation, clauses frequently used by various types of contracts and the effect of languages on understanding of contracts and the misunderstandings that arise out of poorly drafted contracts. This paper also looks at one of Shakespeare's plays of Merchant of Venice and analyses the contractual bond entered by Shylock and its interpretation by Portia. The interesting observations regarding the same are further elaborated keeping the pronouncement of the court of equity's verdict.

A parallel is drawn with respect to sound interpretation. Certain rules of interpretation of statutes and contractual clauses and case laws are discussed with special focus on language with sections from various acts together shall weave the fabric of this paper. In conclusion the paper promotes the importance of language in law and in contract law. This paper would be hereby divided into the Shakespearean law and literature taking it forward by the elaboration of the interpretation clause.

On the onset of the next section contractual clauses are elaborated and understood and the conclusion is drawn by the end of it that language and that too good language is essential part of contracts and how they can make or break contracts.

Contracts play a very important role in the day to day life of every person. Right from the simplest things to life changing affiliations and decisions. We sometimes get into contracts without realizing it and that's a testimony to its indispensable nature. One needs to keep in mind that all contracts are agreements but not all agreements are contracts. A contract is a legally enforceable agreement. A contract doesn't have less than three basic ingredients.

Those are:
Proposal, Acceptance, Consideration. There are several facets towards this structure. Communications relating to proposal and the acceptance thereof are one of those. Communications in contract law as devised under the Indian Contract act works into either words, or conduct. The acceptor must make is consent shown or do actions that imply consent. It is very interesting to note that language is a key part of all basic ingredients.

For example, proposal drafts are either dictated into a written language or spoken to the party. The acceptance towards the said proposal must be made clear in stipulated time and words and/or actions. One can understand how language can be the body language depicting the conduct of acceptance.

The consideration of a contract, according to the author is the ingredient that heavily depends on crucial use of languages. Several important information in these documents are implied by a set of complicated legal terminologies (Crandall, 1979); syntactic features are probably more distinctive of legal English than are lexical ones, and certainly account for more of the difficulties of laymen in comprehending it (Danet, 1980)[1]

It is therefore of importance to understand language and its different dimensions. What better way to understand than take of the works of the giant of the literature world and understand his view in contract law. The next section briefly analyses Shakespeare's MERCHANT OF VENICE and the contractual bond entered by Antonio and Shylock the jew.
Shylock's Law Suit and Law of Contracts.

Although at its core Merchant of Venice is a mirror of the complexity of human emotions, the constant feud between the dichotomy of human life, mercy and equity, one can't miss to notice the angle of contract law that comes in to picture in Act IV scene I where the civil suit brought by Shylock is quoted. Legally speaking The Merchant of Venice is concerned with contract law but issues relating to specific performance of contracts, conveyance is also strongly reflected. Shylock and Antonio make a contract in which Antonio will lose a pound of his flesh if he does not pay back money borrowed for Bassanio.

The two men verbally solidify the bond and Shylock takes the contract to the notary. The trial scene that is shown illustrates the difference between equity and strict construction of law. There are different interpretations of the same contract made by Shylock, Portia, and the Duke. Shylock clings to the contract and insists on the specific performance of the contract. Shylock is seen asserting, I stand for judgment� (4.1.103) and I stand here for law,� (4.1.142) demonstrating a merciless interpretation of contract law. When Portia's iconic Quality of Mercy monologue falls on Shylock's deaf ears Portia turns the diction of the contract around in order to incriminate Shylock. Portia voids Shylock's contract on a technicality of wording, in which Shylock can take just a pound of flesh� (4.1.324) only, not blood[2]

If it weren't for Portia applying the principles of literal rule of construction the contractual agreement would be in Shylock's favor tilting the balance of convenience to his side. Shylock is defeated on a legal technicality which is cropped up by the interpretation (or the lack of it). It costed Shylock a loss of not only the interest but also his principle amount. another legal principle which she uses is that of expression unius est exclusio alterius: one expressed thing excludes another.

Therefore, by mentioning of the pound of flesh, blood is excluded. The reason being the first use of the word, expressed was in the description of the bond. Portia reads the bond as if what is not explicitly said is thereby excluded or forbidden. She wants to set a precedent whereby what the law does not command it forbids. It was only the interpretation that paved way for Portia's victory.

Especially in this masterpiece Shakespeare highly discourages the adamant sticking to one interpretation and opens doors for alternative interpretation. [3] The way the trial scene is played out comes in tandem with the interpretation cannot be ignored. The need for language and the clear use of it can be seen as a preventive measure once the nuances of the failed contract are examined. It is pertinent to note that While Shakespeare was writing The Merchant of Venice� 1596-1598 (Garber, 2005, 83), Edward Coke was litigating Slad's case, 1597-1602 where the absolute pre requisite of have a quid pro quo, a requisite condition of a condition was highlighted. When one analyses the contractual bond of Shylock The legal basis of the flesh-bond is to be found in the Laws of Twelve Tables of the ancient Rome.

The cruelty and harshness of the early law of debt, among the Romans, were exceedingly great� wrote Obenchain in 1928. Roman law knew not only measures directed against the property of the debtor, but those against his person. [4]For the element of consideration key element of clarity and consent implied and expressed is of utmost importance. In Shakespeare's time contracts bore little relation to law, as the key elements of offer and acceptance and valuable consideration had not yet fully developed.

Nonetheless the play showed relevance in the given day and age. A debatable issue however is the validity of the bond and the specific performance. The researcher comes to the following conclusion after analyzing the bond in the light of the present research paper: Shakespeare surely has shades of sound legal knowledge and Merchant of Venice is one such work. The language by which the contract was entered into, held interpretative and executive value. The finesse in which it was interpretated by Portia just brings out the beauty of it. Every contract facilitates such interpretation through its language used. One mustn't undermine the true essence of a language. Be it in the court of equity or consumer contracts with several layered contractual clauses.

One can't help but notice that as contract law evolved there have been efforts made to understand the evolving principles of interpretation. While one is aware of the fact that the rules of interpretation are only used for statutes, there are certain defining clauses in contracts too, understanding which there is possibility of better performance of the said contract. Certain contractual agreements have clauses that if not framed properly result in disputes, costly litigation and an unbearable strain on the mind. While one understands the essence of understanding� one can't stop but notice certain rules of interpretation that can be applied to the interpretative clauses too.

Rules Of Interpretation And Interpretative Contractual Clauses

Every once in a while, the line between contractual interpretation and statutory interpretation is blurred but one needs to understand that contracts are not statutes, but are based on statutes. You can't have contractual agreements without its statutory interpretation. The contractual interpretation differs as its privity is only between the two parties and thus as private laws it only affects rights and obligation of parties. There is an in-rem approach with statutes. Both their basic premises are different. The intent and the people over whom it is governed are differing from in rem and in personem.

The words defining such privity of contracts stating the air tight nature of the contract over the ever-expansive reach of a legislation are completely different. There are two basic approaches to contractual interpretation. Subjective and objective. Questions relating to whether the fact of dispute or in question would come under scope of the drafted contract would fall under subjective approach exclusively on the basis of intentions, subjectively. Implied and expressed intention can make or make contracts and their sound interpretation is based on language used properly.

An objective approach would be reference to external approaches and situations. The objective nature reflects consensus of parties, mutual deliberation and getting needed results through it without taking subjective intentions in picture.

In the landmark judgement of Investors Compensation Scheme Ltd. Vs. West Bromwich Building society� lord Hoffman observed that,  the right meaning is what the document conveys to a reasonable person; this includes everything in the matrix of fact�, or relevant background circumstances; prior negotiations are excluded from this (a point which has been much criticized since), the meaning of words is not a literal meaning, but the one reasonably understood from the context, and the meaning should not contradict a common sense view of what a contract required.� it was affirmed in Chartbrook that there may be cases where the literal definition or interpretation would lead to a commercially irrational outcome; and that in such situations, the courts should be prepared to correct those mistakes.

The House of Lords also mentioned in Chartbrook, though as obiter, that although prenegotiations remain inadmissible when interpreting contracts, it is nonetheless important that these negotiations are well documented and retained as evidence. Such evidence may well be determinative in claims for estoppel or obtaining an order for rectification [5]

Importance of Context' in Interpretation of Contracts (Novartis Vaccines and Diagnostics Inc. vs. Aventis Pharma Limited, 2010(2) Bom CR 317):
While drafting contracts between two parties is drafted, there is a pre conceived notion that the words to be construed should be construed in their ordinary and popular sense, since the parties to the contract must be taken to have intended, as reasonable men, to use words and phrases in their commonly understood and accepted sense.

At paragraph 40 and 42 of the judgment, it was observed:
The contract/agreements need to be read as a whole considering the nature & the purpose of the business. The clause and the contract as a whole even if is clear and unambiguous, the court needs to consider the same in the facts and circumstances of the case. It is necessary to see relationship between words; sentences; clauses; chapters and the whole document. It cannot be read in isolation. The aspect of faith, trust, fiduciary relationship and understanding between the parties, just cannot be overlooked, while interpreting any such private commercial documents.�

Merely because there is no negative covenant, that itself is not sufficient to permit other partners to do rival or competing business of the same nature.�

It is evident from the above quoted parts that clarity is supposed to be achieved. The court's responsibility not only lies in dispensing justice but also interpret the contract to the closest as intended by the parties. The researcher would like to draw close attention towards the phrase,  It is necessary to see relationship between words; sentences; clauses; chapters and the whole document�. For the sake of brevity the researcher reiterates the correct usage of words.

In M.O.H. Uduman and Ors. v. M.O.H. Aslum, AIR 1991 SC 1020, it was held that it was through the clear drafting of the contract that the intentions of the parties must be shown. (the intention of the parties must be gathered from the language used in the contract by adopting harmonious construction of all the clauses contained therein. The cardinal principle is to ascertain the intention of the parties to the contract through the words they have used, which are key to open the mind of the makers. It is seldom that any technical or pedantic rule of construction can be brought to bear on their construction. The guiding rule really is to ascertain the natural and ordinary sensible meaning to the language through which the parties have expressed themselves, unless the meaning leads to absurdity.�)

Documents like, deleted words, documents . (Annexure, schedules, price lists, job order, etc.)accompanying the contract, Antecedent Agreements and Pre-contractual Documents
Documents forming part of the same transaction (e.g. long-term construction contracts) can be used for the interpretation of contracts.

Suggestions for better drafting of contracts and conclusion:
Language is an indispensable part of contract drafting. Implied and expressed consideration weave the fiber of a legally binding contract. Once when the right words are used in the perfect context and meaning, well-defined clauses are formed which help in the almost perfect contract execution. Be it punctuations or body language you cant understand contracts sans the understanding of language. Various expressions are given throughout statutes like The Indian contract act, Maharashtra Rent control act etc, have clauses that the researcher thought are in themselves having a wide preview. In order to draft efficient crystal-clear contracts, one much understand grammar.

Understand the use of an apostrophe, as the devil is in the details. Considerations, specific performances can be twisted and turned otherwise. The parties must come to a mutual consensus of performances and considerations and the same must be expressed. Drafters use technical jargon and legal grammar and archaic words like hereinafter whereabout and the like that puzzle lawyers and create chaos for parties.

Courts have recognized the use of comprehensible language. In order to achieve simplicity of language, one must recognize and learn the complexity of it. The voices, tenses, and commas from the foundation of seamless and telepathic execution and in turn better performance of contracts.

  1. Sosas, Rowena. (2017). The Language of Agreement: A Content Analysis of Employment Contracts. 22. 58-86. 10.9790/0837-2212025886.
  2. Ashley Sheaf , Contract Law in The Merchant of Venice, Jul 28 2014
  3. (2011) PL December S-25.
  4. Tatevik S. Karapetyan Legal interpretation of Shylock's bond, (IJHSSE), Volume 6, Issue 8, Page 88.
  5. Vivek Verma, Rules for interpretation of contracts, Indian case laws,

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