Courts get active in interpreting the meaning of leasing contracts

The 'objective theory' of contract has been given a recent workout in New South Wales by Courts interpreting leases. While the results were contradictory, they do underline the need for business to be practiced honestly.

The New South Wales Administrative Decisions Tribunal decision of Toga Pty Ltd v Perpetual Nominees Limited and Ord (link here http://www.caselaw.nsw.gov.au/action/PJUDG?jgmtid=158232) was extraordinary in ordering that one party consents to vary the contract so as to uphold the 'fidelity of the bargain' and disregard the part where is said "rent free" in an option lease. What would have been the bargain of the century was undone by the Tribunal asserting that the lessee was obliged to respect the underlying spirit of the agreement despite the glaring part of the document which said "rent free".