Interpretations of Contracts. Article 1370-1379. Obligations and Contracts.

Summary

This video script delves into the interpretation of contracts, focusing on Article 1370 of the Philippine Civil Code. It explains that clear contract terms should be taken literally, but if terms contradict the parties' evident intention, the latter prevails. The script also covers subsequent acts, general terms, and resolving ambiguities. It discusses how to interpret contracts in light of subsequent actions, customs, and the principle that obscure terms should not favor the party causing the obscurity. The video concludes with a discussion on resolving doubts in contracts, emphasizing the importance of intention and reciprocity.

Takeaways

• 📜 Article 1370 states that if the terms of a contract are clear and leave no doubt about the intentions of the parties, the literal meaning of the stipulations should be applied.
• 🔍 If the words of a contract appear to be contrary to the evident intention of the parties, the intention should prevail over the literal meaning.
• 🏡 In cases of ambiguity, such as a contract titled as a lease but involving a transfer of ownership for a sum of money, the contract should be interpreted according to the evident intention, which in this case would be a sale.
• 👥 Article 1371 emphasizes that the intention of the contracting parties should be judged by considering their contemporaneous and subsequent acts.
• 🚫 Article 1372 clarifies that general terms in a contract should not be understood to include things that are distinct and different from what the parties intended to agree upon.
• 🔗 Article 1373 indicates that if a contract stipulation can have multiple meanings, the interpretation that makes the contract valid and effectual should be chosen.
• 📝 Article 1374 suggests that all stipulations of a contract should be interpreted together, and doubtful terms should be given the sense that results from considering the contract as a whole.
• 🗣️ Article 1375 instructs that words with different significations should be understood in the sense that is most in keeping with the nature and object of the contract.
• 🌐 Article 1376 highlights the importance of considering local usage or customs in interpreting ambiguities in a contract.
• ❌ Article 1377 states that the interpretation of obscure words or phrases should not favor the party who caused the obscurity, especially in contracts like insurance where terms are often drafted by one party.
• 🚫 Article 1378 provides that if it's impossible to settle doubts about a contract, especially if it refers to the principal object and cannot be determined, the contract should be considered void.

Q & A

What is the primary rule for interpreting contracts according to Article 1370?

The primary rule for interpreting contracts, as stated in Article 1370, is that 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.

How does Article 1370 handle situations where the words of a contract appear to contradict the evident intention of the parties?

If the words of a contract appear to be contrary to the evident intention of the parties, the latter shall prevail over the former, meaning the intention of the parties will take precedence over the literal wording.

What does Article 1371 emphasize when determining the intention of contracting parties?

Article 1371 emphasizes that the acts of the parties, both contemporaneous and subsequent, should be principally considered when interpreting their intentions.

Can you provide an example of how Article 1370 is applied in a scenario involving a contract for the sale of land?

In a scenario where a contract titled 'contract of lease' involves the transfer of land ownership for 1 million pesos, Article 1370 would apply the evident intention of transferring ownership, interpreting it as a contract of sale despite the title suggesting a lease.

What does Article 1372 state about the use of general terms in contracts?

Article 1372 states that general terms in a contract shall not be understood to comprehend things that are distinct and cases that are different from those upon which the parties intended to agree.

How should contracts be interpreted when some stipulations admit of several meanings, as per Article 1373?

According to Article 1373, if a stipulation of a contract can admit several meanings, it should be understood as bearing the import which is most adequate to render it effectual, favoring a valid interpretation over an illegal one.

What is the role of the nature and object of the contract in interpreting words with different significations, as per Article 1375?

Article 1375 states that words which may have different significations should be understood in the sense that is most in keeping with the nature and object of the contract.

How does Article 1376 guide the interpretation of contracts when there are ambiguities?

Article 1376 provides that the usage or customs of the place should be considered in the interpretation of ambiguities of a contract and can be used to fill in the omission of stipulations that are ordinarily established.

What is the principle behind Article 1377 when interpreting obscure words or stipulations in a contract?

Article 1377 states that the interpretation of obscure words or stipulations in a contract should not favor the party who caused the obscurity, but rather be construed against them and in favor of the other party.

What happens if it is impossible to resolve doubts about a contract using the rules in the preceding articles, according to Article 1378?

If 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 interest shall prevail. If the contract is onerous, the doubt shall be settled in favor of the greatest reciprocity of interest. If the doubt pertains to the principal object of the contract and it cannot be determined, the contract shall be void.