Contract interpretation – ambiguity – agreed damages

The New South Wales Supreme Court has followed the High Court decision of Australian Broadcasting Commission v Australasian Performing Right Association (1973) 129 CLR 99 in finding that ambiguous clauses should be construed according to the interpretation which would remove absurdities in light of the apparent intentions of the parties. However, an unambiguous clause must be given effect, regardless of the intentions of one party when agreeing to it.

The Court also confirmed that, where damages are difficult to value, there is all the more reason to uphold an agreed (liquidated) damages clause. [Case ref: The City of Sydney v Streetscape Projects (Australia) Pty Limited [2011] NSWSC 1214.]