- worked examples are integral parts of finance and other commercial contracts;
- it is often only when narratives and formulae are worked through that their true effect can properly be seen;
- where there is more than one worked example, consistency among the examples (in this case the inclusion of a missing step), strongly suggests that this was a deliberate choice by the drafter; and
- it is inherently more probable that the parties’ true bargain is to be found in the worked examples.
Important Takeaways from This Case
- English law legal drafters should strongly consider including worked examples where complex formulae are used;
- they should include more than one worked example; and
- boilerplate construction clauses should be carefully drafted to ensure they do not contribute to any confusion concerning the precedence of worked examples.
One of the issues that the case does not address is that parties in a project financing also often rely on agreed and audited computer models when determining whether or not loans can be drawn or dividends paid. This case gives no guidance on what should happen if that computer model does not accurately reflect the terms of the loan documentation. This issue should be specifically addressed in the relevant documentation.
If you have any questions concerning the material discussed in this client alert, please contact the following members of our Project Development and Finance Practice:
Steven Gamble +27 823 305 689 firstname.lastname@example.org
Graham Vinter +44 20 7067 2062 email@example.com
This post can also be found on CovAfrica, the firm’s blog on legal, regulatory, political and economic developments in Africa.