There are many kinds of contracts in real life. In the event of a dispute, the parties often disagree on the meaning of the terms of the contract. This involves the interpretation of the terms of the contract. So, as an adjudicator of a contract dispute, what kind of rules does the judge follow to interpret the contract clause to determine the meaning of the disputed clause?
Based on the judicial interpretations of the Civil Code and the Supreme Court, the author summarizes the following aspects. Note that there is an order of preference for these aspects.
1. "Pick out the words". Based on the usual meaning of the phrase. The author believes that the usual meaning of words and sentences can be found in the "Xinhua Dictionary". Except where there is evidence to prove that there is a common understanding between the parties of the terms of the contract that is different from the ordinary meaning of the words and phrases. In other words, the meaning of the common understanding of the parties takes precedence.
2. "Overall". Incorporate relevant terms. The meaning of individual clauses should be seen in conjunction with other relevant clauses, depending on the context and in general. Can't be taken out of context.
3. "Purpose Look". Look at the nature and purpose of the contract. The meaning of the terms of the contract should be understood in conjunction with the nature of the contract and the purpose for which the parties entered into the contract. You can't just look at the terms.
4. Look at "trading Xi". The parties often have "self-evident" meanings that are not spoken, not exhausted, and needless to say, which is clear to both parties. These "trading Xi" identifications are interesting controversies. The law provides for judges to determine in the following order: first, the usual practice between the parties in the course of their transactions. This one takes precedence. The second is the practice that is commonly adopted in the place of the transaction or in a certain field or industry and is known or should be known to the counterparty at the time of entering into the contract. This one is second. The law stipulates that the burden of proof rests with the party making the claim as to whether a transaction Xi is constituted. When determining "transaction Xi", judges do not violate the mandatory provisions of laws and administrative regulations and do not violate public order and good customs.
5. "Judge's discretion". Make value judgments based on the principle of good faith.
6. "Evidence of process behavior". Look at its deeds and know its meaning. By ascertaining factors such as the background of the contract, the negotiation process, and the performance behavior, the original intent of the contract clause is confirmed.
7. "Try to be as effective". If there are two or more interpretations of a contract clause that may affect the validity of the clause, the interpretation shall be in a direction conducive to the validity of the clause;
8. "Corresponding rights and righteousness". If it is a gratuitous contract, it shall be interpreted in the direction of a lighter burden on the debtor.
Judging from the above interpretation rules, there is actually a guiding ideology: the duty of a judge is to fully explore the true intentions of the parties in the terms of the contract on the premise of not violating the mandatory provisions of laws and administrative regulations and not violating public order and good customs, implement contract autonomy, be honest and trustworthy, be fair and reasonable, and maintain and promote transactions.
It is not easy to interpret the terms of a contract in your favour in a case-by-case dispute and be accepted and upheld by the judge. The professional ability of civil and commercial lawyers to deal with contract disputes largely depends on their ability to interpret contract terms.
Relevant legal provisions:
1. Articles 466 and 142 of the Civil Code.
Articles 1 and 2 of the Supreme People's Court's Interpretation on Several Issues Concerning the Application of the General Principles of Contracts of the Civil Code of the People's Republic of China (hereinafter referred to as the Interpretation) promulgated and implemented on December 5 of the same year.