Interpretation of Contracts Flashcards
2045 Determination of intent of parties
Interpretation of a contract is the determination of the common intent of the parties.
Offer says meet at 4 (meaning 4am) Offeree understands 4pm. Under the objective theory of contract, offer is correct.
2046 No further interpretation when intent is clear
When the words of a contract are clear and explicit, and lead to no absurd consequences, no further interpretation may be made in search of the parties’ intent
2047 Meaning of words
The words of a contract must be given their generally prevailing meaning. Words of art and technical terms must be given their technical meaning when the contract involves a technical matter.
2048 Words susceptible of different meanings.
Words susceptible of different meanings must be interpreted as having the meaning that best conforms to the object of the contract
2049 Provision susceptible of different meanings
A provision susceptible of different meanings must be interpreted with a meaning that renders it effective and not with one that renders it ineffective.
2050 Provision interpreted in light of each other
Each provision in a contract must be interpreted in light of the other provisions so that each is given the meaning suggested by the contract as a whole
2051 Contract worded in general terms
Although a contract is worded in general terms, it must be interpreted to cover only those things that it appears the parties intended to include
2052 Situation to which the contract applies
When the parties intend contract of general scope, but eliminate doubt, include a provision that describes a specific situation, interpretation must not restrict the scope of the contract to that situation alone
2053 Nature of contract, equity, usages, conduct of the parties and other parties
A doubtful provision must be interpreted in light of the nature of the contract, equity, usages, the conduct of the parties before and after the formation of the contract, and of other contracts of a like nature between the same parties
2054 No provision of the parties for a particular situation
When the parties made no provision for a particular situation, it must be assumed that they intended to bind themselves not only to the express provisions of the contract, but also to whatever the law, equity, or usage regards as implied in a contract of that kind of necessary for the contract to achieve its purpose.
2055 Equity and Usage
Equity, as intended in the preceding articles, is based on the principles that no one is allowed to take unfair advantage of another and that no one is allowed to enrich himself unjustly at the expense of another. Usage is a practice regularly observed in affairs of nature identical or similar to the object of a contract subject to interpretation.
2056 Standard form contract.
In case of doubt that cannot otherwise be resolved, a provision in a contract must be interpreted against the party who furnished its text. A contract executed in a standard form of one party must be interpreted, in case of doubt, in favor of the other party.
2057 Contract interpreted in favor of obligor
In case of doubt that cannot otherwise be resolved, a contract must be interpreted against the obligee in favor of the obligor of a particular obligation.
Yet, if doubt arises from lack of a necessary explanation that one party should have given, or from negligence or fault of one party, the contract must be interpreted in a manner favorable to the other party, whether obligee or obligor.
