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Prenn v Simmons, [1971] 1 WLR 1384 ( H.L.)


D was suppose to collect $ from P. P said didn’t have to pay because less then X available in dividends. D says condition fulfilled. Problem is what constitutes profit – the comp or comp and subsidiaries.
D is claiming that if the construction of the agreement does not mean what he intended it to that it should be rectified to do so.


Are prior negotiations admissible in order to interpret a contract?


Negotiating history is not looked at, because it is the contract that tells you what the parties agreed to (common intent). There are exceptions to this where negotiations may be look at (it is admissible):
**Establishing the factual context – the background (to understand the contract) – mutually known.
**Establish technical meaning (MacDonald).
**Support a claim for rectification.


Here the negotiations show you the rationale for the whole thing – if it didn’t include profits of sub D would not have agreed


D wins – Ps argument does not fit with the aim of the agreement

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