Drafting definitions and recitals requires care


This decision concerned the interpretation of the definitions clause in a patent licence was at issue. The case has interesting implications for the drafting of commercial agreements and for the interpretation of the vast majority of existing commercial contracts. In looking at the possible alternative meanings of a definition, the Court of Appeal (CA) upheld a decision that a single defined term could potentially have two different meanings when used in different parts of the agreement. The CA also considered the effect of the recitals (those introductory words at the beginning of an agreement which attempt to ‘set the scene’) when interpreting the agreement.


points to note:

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