The law on this point was recently and concisely stated by Halfyard J. in Etheridge v. Sheaves et al., 2005 BCSC 464 at ¶ 22-23: Where the parties to a written agreement disagree about the meaning of its terms (in the context of a lawsuit), the court must decide what meaning the parties intended to give to the disputed words. This is to be done by objectively examining the words in their immediate and overall contractual context, and in the context of the surrounding circumstances. The external circumstances which the court may consider, generally speaking, are the facts which existed and were known to the parties at the time the contract was finalized (the "factual matrix"), insofar as these circumstances may assist in determining the meaning of the disputed words. On the issue of interpretation, the parties cannot give evidence as to what meaning they intended the disputed words to have. Nor can evidence be given about what the parties said or wrote to each other in the course of their negotiations leading up to the making of the contract. …
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