1. Interpretation of Contracts

8/13/2019 1. Interpretation of Contracts

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CHAPTER 5Interpretation of Contracts

Article 1370. If the terms of a contract are clear and leave no doubt upon theintention of the contracting parties, the literal meaning of its stipulations shall

control.

If the words appear to be contrary to the evident intention of the parties, the lattershall prevail over the former. (1281)

Article 1371.In order to judge the intention of the contracting parties, theircontemporaneous and subsequent acts shall be principally considered. (1282)

Article 1372.However general the terms of a contract may be, they shall not beunderstood to comprehend things that are distinct and cases that are differentfrom those upon which the parties intended to agree. (1283)

Article 1373.If some stipulation of any contract should admit of severalmeanings, it shall be understood as bearing that import which is most adequateto render it effectual. (1284)

Article 1374.The various stipulations of a contract shall be interpreted together,attributing to the doubtful ones that sense which may result from all of them taken

jointly. (1285)

Article 1375.Words which may have different significations shall be understoodin that which is most in keeping with the nature and object of the contract. (1286)

Article 1376. The usage or custom of the place shall be borne in mind in theinterpretation of the ambiguities of a contract, and shall fill the omission ofstipulations which are ordinarily established. (1287)

Article 1377. The interpretation of obscure words or stipulations in a contractshall not favor the party who caused the obscurity. (1288)

Article 1378.When it is absolutely impossible to settle doubts by the rulesestablished in the preceding articles, and the doubts refer to incidentalcircumstances of a gratuitous contract, the least transmission of rights and

interests shall prevail. If the contract is onerous, the doubt shall be settled infavor of the greatest reciprocity of interests.

If the doubts are cast upon the principal object of the contract in such a way thatit cannot be known what may have been the intention or will of the parties, thecontract shall be null and void. (1289)


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Article 1379.The principles of interpretation stated in Rule 123 of the Rules ofCourt shall likewise be observed in the construction of contracts. (n)

Rules of Court Rule 130

4. Interpretation Of Documents

Section 10. Interpretation of a writing according to its legal meaning. Thelanguage of a writing is to be interpreted according to the legal meaning it bearsin the place of its execution, unless the parties intended otherwise. (8)

Section 11.Instrument construed so as to give effect to all provisions . In theconstruction of an instrument, where there are several provisions or particulars,such a construction is, if possible, to be adopted as will give effect to all. (9)

Section 12. Interpretation according to intention; general and particular

provisions. In the construction of an instrument, the intention of the parties isto be pursued; and when a general and a particular provision are inconsistent,the latter is paramount to the former. So a particular intent will control a generalone that is inconsistent with it. (10)

Section 13. Interpretation according to circumstances. For the properconstruction of an instrument, the circumstances under which it was made,including the situation of the subject thereof and of the parties to it, may beshown, so that the judge may be placed in the position of those who language heis to interpret. (11)

Section 14. Peculiar signification of terms. The terms of a writing arepresumed to have been used in their primary and general acceptation, butevidence is admissible to show that they have a local, technical, or otherwisepeculiar signification, and were so used and understood in the particularinstance, in which case the agreement must be construed accordingly. (12)

Section 15.Written words control printed. When an instrument consists partlyof written words and partly of a printed form, and the two are inconsistent, theformer controls the latter. (13)

Section 16.Experts and interpreters to be used in explaining certain writings.

When the characters in which an instrument is written are difficult to bedeciphered, or the language is not understood by the court, the evidence ofpersons skilled in deciphering the characters, or who understand the language, isadmissible to declare the characters or the meaning of the language. (14)

Section 17. Of Two constructions, which preferred. When the terms of anagreement have been intended in a different sense by the different parties to it,that sense is to prevail against either party in which he supposed the other


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understood it, and when different constructions of a provision are otherwiseequally proper, that is to be taken which is the most favorable to the party inwhose favor the provision was made. (15)

Section 18. Construction in favor of natural right. When an instrument is

equally susceptible of two interpretations, one in favor of natural right and theother against it, the former is to be adopted. (16)

Section 19. Interpretation according to usage. An instrument may beconstrued according to usage, in order to determine its true character. (17)