Construction of agreement refers to the process of interpreting legal documents and contracts to establish the true intention of the parties involved. Understanding the construction of an agreement is important in legal matters, as it helps to ensure that the parties involved in an agreement are on the same page, and that the terms of the agreement are understood and adhered to.

The construction of an agreement involves a careful analysis of the language used in the agreement as well as the context in which it was created. This includes considering any extrinsic evidence, such as the parties’ prior negotiations, the circumstances surrounding the agreement, and the commercial or legal purpose of the agreement. The construction of an agreement may also involve considering the principles of interpretation or construction set out in case law.

In order to properly construe an agreement, several factors must be taken into consideration. Firstly, the language used in the agreement must be carefully examined. Words and phrases should be given their ordinary and natural meaning, unless a different intention is clearly expressed. It is also important to consider the context in which the words are used, as well as the overall structure and purpose of the document.

Another important factor to consider when constructing an agreement is the relationship between the parties. The courts will often look at the relationship between the parties in order to determine what their true intentions were when entering into the agreement. This includes considering any prior negotiations or agreements between the parties, as well as any course of conduct carried out by the parties since the agreement was made.

It is also important to consider the commercial or legal purpose of the agreement. This involves looking at the reason why the parties entered into the agreement in the first place, as well as the legal or commercial context in which the agreement was made. For example, if the agreement was made in the context of a commercial transaction, it may be necessary to consider industry practices and customs when interpreting the terms of the agreement.

In conclusion, the construction of an agreement involves a careful examination of the language used in the agreement, as well as the context in which it was created. It is important to consider a range of factors, including the relationship between the parties, the commercial or legal purpose of the agreement, and any extrinsic evidence, in order to establish the true intention of the parties involved. By properly construing an agreement, the parties involved can ensure that the terms of the agreement are understood and adhered to.