Reviewing a Contract

By: James Harbridge

In 2003, the Supreme Court rendered a decision regarding the courts’ authority to independently review and interpret the terms of a commercial contract.

Two parties entered into a business contract to establish a restaurant. Pursuant to the contractual terms, the second party was required to furnish certain supplies and products for the restaurant.

However, the first party unilaterally tried to vary the contractual terms by requiring the second party to provide more expensive supplies. The first party refused to compensate the second party for the additional costs.

The second party filed a case accordingly. The Supreme Court overruled the Appeal Court’s decision, and found that the first party was in breach of contract.

The Supreme Court explained that they were entitled to independently review the terms of a contract, and were not rigorously bound by the arguments and explanations put forth by the parties.