Ch. 9 - Interpretation of Contracts

Question 1

(Art. 1370) If the terms of a contract are clear and leave no doubt upon the intention of the contracting parties,

Answer 1

the literal meaning of its stipulations shall control

Question 2

(Art. 1370) If the words appear to be contrary to the evident intention of the parties,

Answer 2

the latter shall prevail over the former (The evident intention shall prevail over the words)

Question 3

What is interpretation?

Answer 3

is the act of making intelligible what was before not understood, ambiguous, or not obvious. It is a method by which the meaning of language is ascertained. The ______________ of a contract is the determination of the meaning attached to the words written or spoken which make the contract

Question 4

What is the “plain meaning rule”?

Answer 4

This rule is applied by Pennsylvania courts, which assumes that the intent of the parties to an instrument is “embodied in the writing itself, and when the words are clear and unambiguous the intent is to be discovered only from the express language of the agreement.”

Question 5

What is the “four corners rule”?

Answer 5

this is a principle which allows courts in some cases to search beneath the semantic surface for clues to meaning. A court’s purpose in examining a contract is to interpret the intent of the contracting parties, as objectively manifested by them.

Question 6

A contract provision is ambiguous if it is

Answer 6

susceptible of two reasonable alternative interpretations.

Question 7

The intention of the parties must be gathered from

Answer 7

that language, and from that language alone

Question 8

It is a cardinal rule in the interpretation of contracts that the _________________ shall be accorded primordial consideration

Answer 8

intention of the parties

Question 9

(Art. 1371) In order to judge the intention of the contracting parties, their

Answer 9

contemporaneous and subsequent acts shall be principally considered

Question 10

(Art. 1372) However general the terms of a contract may be, they shall not be

Answer 10

understood to comprehend things that are distinct and cases that are different form those upon which the parties intended to agree

Question 11

(Art. 1373) If some stipulation of any contract should admit of several meanings, it shall be

Answer 11

understood as bearing that import which is most adequate to render it effectual

Question 12

(Art. 1374) The various stipulations of a contract shall be interpreted

Answer 12

together, attributing to the doubtful ones that sense which may result from all of them taken jointly

Question 13

It is a canon of construction that

Answer 13

“The whole and every part of the statute must be considered in fixing the meaning of any of its parts and in order to produce a harmonious whole”

Question 14

The rule is that a construction that would render a provision inoperative should be avoided; instead,

Answer 14

apparently inconsistent provisions should be reconciled whenever possible as parts of a coordinated and harmonious whole

Question 15

It is a cardinal rule in contract interpretation that the ascertainment of the intention of the contracting parties is to be discharged by

Answer 15

looking to the words they used to project that intention in their contract, that is, all the words, not just a particular word or two, and words in context, not words standing alone.

Question 16

What is the “Complementary-contracts-construed-together” doctrine or No-segregation principle

Answer 16

According to this principle, an accessory contract must be read in its entirety and together with the principal agreement. This principle is used in construing contractual stipulations in order to arrive at their true meaning; certain stipulations cannot be segregated and then made to control.

Question 17

(Art. 1375) Words which may have different significations shall be

Answer 17

understood in that which is most in keeping with the nature and object of the contract

Question 18

What is the rationale behind Art. 1375

Answer 18

The reason for these rules is that it must be presumed that the parties had intended an effective act and not one that is impracticable or illusory

Question 19

(Art. 1376) The usage or custom of the place shall be

Answer 19

borne in mind in the interpretation of the ambiguities of a contract, and shall fill the omission of stipulations which are ordinarily established

Question 20

(Art. 1377) The interpretation of obscure words or stipulations in a contract shall

Answer 20

not favor the party who caused the obscurity

Question 21

(Art. 1378) When it is absolutely impossible to settle the doubts by the rules established in the preceding articles, and the doubts refer to incidental circumstances of a gratuitous contract,

Answer 21

the least transmission of rights shall prevail.

Question 22

(Art. 1378) When it is absolutely impossible to settle the doubts by the rules established in the preceding articles, and the doubts refer to an onerous contract

Answer 22

The doubt shall be settled in favor of the greatest reciprocity of interests

Question 23

(Art. 1378) 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

Answer 23

the contract shall be null and void

Question 24

(Art. 1379) The principles of interpretation stated in Rule 123 of the Rules of Court shall

Answer 24

likewise be observed in the construction of contracts