By: Jeremy Johnson
Published: 9/03/2010
 In Vector Gas Ltd v Bay of Plenty Energy Ltd [2010] NZSC 5 the Supreme Court confronted the questions of contractual interpretation, and of what extrinsic evidence may be adduced to prove the meaning of contractual terms. Throughout the 20th century the parol evidence rule, under which the admission of extrinsic evidence to assist in the interpretation of contracts was severely limited, was gradually worn down, primarily through the creation of numerous exceptions combinedwith a judicial re-examination of the principles of contractual interpretation. The result is an area of law that is over-complicated, which hampers the ability of practitioners to provide sound advice to clients.  

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