The theory of the two stages is based on an outdated exegetical approach
- The two-stage theory is an exegetical theory, which was accepted in nineteenth-century English law. This is the "literal rule" according to which a legal text (law, contract) is interpreted according to the intention of its creator. The intention should be learned only from the clear language of the text. Only when the language is not clear can one go outside the text in order to learn about the intention of the creator (the rule in the Haydn case: [69] (1584) Heydons case). A somewhat softening of this rule is found in the "Golden Rule", according to which it is possible to go beyond the boundaries of the text in order to learn about the intention of the creator of the text even when the language is clear, and this only if the literal interpretation leads to an absurd result (see F.A.R. Bennion, Statute Law. 91( 1983,.nd ed 2,london). This doctrine was strongly criticized in England (see: (). 21law com. No) the interpretation of statutes; 108zander, supra, at 80 .para). It no longer applies, in all its severity, in the interpretation of the legislation (see .f. A . 325( 1984,london) .r. Bennion, statutory interpretationdeviated considerably from it in the interpretation of the contract. The modern approach to contract interpretation found expression in the following words of Judge Lord Wilberforce: The time has long since passed when agreements, even" those under seal, were isolated from the matrix of Internal linguistic considerations... We must inquire beyond facts in which they were set and interpreted purely on Reference the language and see what the circumstances were with reference
To which the words were used, and the object, appearing from those . Circumstances, which the person using them had in(1384- 1383, at[70] (1971) prenn v. Simmonds) "view and in a second parasha he added: There is always a setting in:no contracts are made in a vacum" which they have to be placed. The nature of what is It can be legitimate to have regard to is usually described as the:sorrounding circumstances' but this phrase is imprecise Illustrated but hardly defined. In a commercial contract it is certainly Contract and this in turn presupposes knowledge of the right that the court should know the commerci al purpose of the Tangen genesis of the transaction, the background, the context, the market in-reardon smith line v. Hansen) " which the parties are operating .(995-996, at[71] (1976).13 A similar trend exists in the United States. First, the English verbal rule with its exceptions was absorbed in the interpretation of laws and contracts. In light of the harsh criticism leveled at him, the interpretation of the legislation deviated from it (see r. Dickerson, the interpretation and application of 230(1975) statutes). A similar trend exists in the interpretation of contracts. Again, as a condition for formulating the purpose of the contract from external circumstances, it is no longer required that the language of the contract be unclear.