PRESUMED INTENT

A construction contract is a mutual or legally binding agreement between two

parties based on policies and conditions recorded in document form. The two
parties involved are one or more owners, and one or more contractors. It is
virtually a different subject. When construing a contract, be it in writing or by
word of mouth, you are considering the intentions of the two parties – who have
agreed upon the terms that shall bind them. One of the doctrine for the construction
of contract as stated by Lord Denning was ‘Presumed Intent.’

Under the above stated doctrine, it was held by the Courts that instead of asking
the parties whether they impliedly agreed on a term or not, they would settle the
case with the presumed intentions of the parties. It was assumed that parties must
have agreed upon a fair and reasonable solution and the same would be construed
by the Court for the construction of the contract so as to give effect to the Doctrine
of ‘Presumed Intent.’

This doctrine was even applied in the cases when a new situation arises in a
contract which the parties have not anticipated about. We cannot credit a party
with the foresight of the prophet or by a lawyer by asking and accusing him of the
new situation.

Now finally the ‘presumed intent’ takes hold. When a particular case demanding
this doctrine reached House of Lords, LJ Simon in his speech agreed to follow this
principle to give a just and reasonable conclusion to the parties. He did not wish to
bind the parties for the situations or the events that they have not anticipated about
to take place in the future.

So, the same doctrine was then supposed to be followed in Frustration cases,
Exemption Clauses, Inflation cases and family arrangements time. Lord Denning
then thought that in this case of an unforeseen turn of events, is the Court justified
in asking itself : What is fair and just solution of the problem of new situation ?