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Chapter 5

CHAPTER 5 : Interpretation of Contracts RULES FOR INTERPRETATION OF A CONTRACT ARTICLE 1370 If the terms of a contract are clear and leave no doubt upon the intention 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 latter shall prevail over the former. INTERPRETATIONS OF A CONTRACT is the determination of the meaning of the terms or words used by the parties in their written contra

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71 views2 pages

Chapter 5

CHAPTER 5 : Interpretation of Contracts RULES FOR INTERPRETATION OF A CONTRACT ARTICLE 1370 If the terms of a contract are clear and leave no doubt upon the intention 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 latter shall prevail over the former. INTERPRETATIONS OF A CONTRACT is the determination of the meaning of the terms or words used by the parties in their written contra

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CHAPTER 5 : Interpretation of Contracts

RULES FOR INTERPRETATION OF A CONTRACT


ARTICLE 1370
If the terms of a contract are clear and leave no doubt upon the intention 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 latter shall prevail over the
former.

INTERPRETATIONS OF A CONTRACT is the determination of the meaning of the terms or words used by the parties in
their written contract.

Literal meaning controls when language clear

Evident intention of parties prevails over terms of a contract

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

Contemporaneous and subsequent acts relevant in the determination of intention. 1371

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

Special intent prevails over a general intent. 1372

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

Interpretations of stipulation with several meanings one of which would render it effectual, it should be given that obligation.
1373

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)

Various interpretation of contracts shall be interpreted together, attributing to the doubtful ones that sense which may result from
all of them taken jointly. 1374

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

Words which may have different significations shall be understood in that which is most in keeping with the nature and object of
contract. 1375

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

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

Article 1378
When it is absolutely impossible to settle doubts by the rules established in the preceding articles, and the doubts refer to
incidental circumstances of a gratuitous contract, the least transmission of rights and interests shall prevail. If the contract is
onerous, the doubt shall be settled in favor of the greatest reciprocity of interests.

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

Article 1379
The principles of interpretation stated in Rule 123 of the Rules of Court shall likewise be observed in the construction of
contracts.

KINDS OF DEFECTIVE CONTRACTS

1. Rescissible Contracts- are those validly agreed upon because all the essential elements exist, and therefore, legally
effective, but in the cases established by law, the remedy of rescission is granted in the interest of equity.
2. Voidable Contracts- are those which possess all the essential requisite of a valid contract but one of the parties are
incapable of giving consent, or consent is vitiated by mistakes, violence, fraud and etc.
3. Unenforceable Contracts- cannot be sue upon or enforced unless they are ratified.
4. Void or inexistent contracts- they are absolutely void or null.

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