Obligations and Contracts – Rules of Interpretation

Obligations and Contracts – Rules of Interpretation

Art. 2045. Determination of the intent of the parties. Interpretation of a contract is the determination of the common intent of the parties.

Art. 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.

Art. 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.

Art. 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.

Art. 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.

Art. 2050. Provisions 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.

Art. 2051. Contract worded in general terms. Although a contract is worded in general terms, it must be interpreted to cover only those things it appears the parties intended to include.

Art. 2052. Situation to which the contract applies. When the parties intend a contract of general scope but, to eliminate doubt, include a provision that describes a specific situation, interpretation must not restrict the scope of the contract to that situation alone.

An 2053. Nature of contract, equity, usages, conduct of the parties, and other contracts between same 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.

Art. 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 or necessary for the contract to achieve its purpose.

An 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, as intended in the preceding articles, is a practice regularly observed in affairs of a nature identical or similar to the object of a contract subject to interpretation.

Art. 2056. Standard-form contracts. In case of doubt that cannot be otherwise 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.

Art. 2057. Contract interpreted in favor of obligor. In case of doubt that cannot be otherwise resolved, a contract must be interpreted against the obligee and in favor of the obligor of a particular obligation. Yet, if the 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.