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CHARTBROOK LTD v PERSIMMON HOMES LTD & ORS

Their Lordships indicated, in obiter dicta, that there was no clearly established case for revisiting the rule in Prenn v Simmonds (1971) 1 WLR 1381 that pre-contractual negotiations were inadmissible in construing a contract; furthermore, Partenreederei MS Karen Oltmann v Scarsdale Shipping Co (The Karen Oltmann) (1976) 2 Lloyd's Rep 708 was an illegitimate extension of the "private dictionary" principle which, taken to its logical conclusion, would destroy the exclusionary rule and any advantages which it might have.

7 July 2009

The appellant developer (P) appealed against a decision ((2008) EWCA Civ 183, (2008) 2 All ER (Comm) 387) in favour of the respondent (C) concerning the interpretation of an agreement to develop C's land. Under the agreement P was to obtain planning permission, construct a development on the site and then sell the properties. The price payable by P under the agreement included an "Additional Residential Payment" (ARP) defined as "23.4% of the price achieved for each Residential Unit in excess of the Minimum Guaranteed Residential Unit Value less the Costs and Incentives". The judge at first instance and the Court of Appeal agreed with C's interpretation of the definition of the ARP. P's argument, if it failed on the construction issue, was that the House should take into account the pre-contractual negotiations. P submitted that the rule in Prenn v Simmonds (1971) 1 WLR 1381 HL that pre-contractual negotiations were inadmissible in construing a contract was illogical and prevented a...

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