Ch. 9 - Interpretation of Contracts Flashcards
(Art. 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
(Art. 1370) If the words appear to be contrary to the evident intention of the parties,
the latter shall prevail over the former (The evident intention shall prevail over the words)
What is interpretation?
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
What is the “plain meaning rule”?
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.”
What is the “four corners rule”?
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.
A contract provision is ambiguous if it is
susceptible of two reasonable alternative interpretations.
The intention of the parties must be gathered from
that language, and from that language alone
It is a cardinal rule in the interpretation of contracts that the _________________ shall be accorded primordial consideration
intention of the parties
(Art. 1371) In order to judge the intention of the contracting parties, their
contemporaneous and subsequent acts shall be principally considered
(Art. 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 form those upon which the parties intended to agree
(Art. 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
(Art. 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
It is a canon of construction that
“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”
The rule is that a construction that would render a provision inoperative should be avoided; instead,
apparently inconsistent provisions should be reconciled whenever possible as parts of a coordinated and harmonious whole
It is a cardinal rule in contract interpretation that the ascertainment of the intention of the contracting parties is to be discharged by
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.
What is the “Complementary-contracts-construed-together” doctrine or No-segregation principle
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.
(Art. 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
What is the rationale behind Art. 1375
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
(Art. 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
(Art. 1377) The interpretation of obscure words or stipulations in a contract shall
not favor the party who caused the obscurity
(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,
the least transmission of rights shall prevail.
(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
The doubt shall be settled in favor of the greatest reciprocity of interests
(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
the contract shall be null and void
(Art. 1379) The principles of interpretation stated in Rule 123 of the Rules of Court shall
likewise be observed in the construction of contracts
