If there is one thing you can be sure of, it’s that courts will wrestle with issues of contractual interpretation on a regular basis. From time to time, such decisions signal a substantive development in the law (or a change of direction), while others refine the process or comment upon particular aspects of the overall approach courts take in this area. One recent case that looked at an issue related to contract interpretation was the decision of the Court of Appeal in Bou-Simon vs BGC Brokers, decided earlier this month.  

It concerned the interpretation of an agreement made between Mr Bou-Simon and BGC Brokers.  The question the court dealt with was whether a particular term should be implied in the agreement. The agreement in question governed the terms of Mr Bou-Simon’s employment with BGC. At the time the agreement was entered into, it was intended that Mr Bou-Simon would become a partner in the firm. Part of the agreement concerned a loan by BGC to Mr Bou‑Simon, which was to be made within 30 days of Mr Bou-Simon becoming a partner and subsequently repaid over time. The loan could also be repaid in full on demand if there was a “material impairment” of Mr Bou-Simon’s creditworthiness. The agreement also confirmed that the balance of the loan would be written off only if Mr Bou-Simon ceased to be a partner after the expiry of an “initial period” of four years. 

It is not appropriate to apply hindsight and to seek to imply a term in a commercial contract just because it appears to be fair or because you consider that the parties would have agreed it if it had been suggested

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