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Definitions
1. The subject-matter of interpretation
2. Interpretation based on subjective standard (establishing the intention)
3. Interpretation based on objective standard (the criterion of a reasonable person)
4. Auxiliary criteria of interpretation
5. Specific rules of interpretationIllustration 1: When subsidiary company asked the plaintiff bank to grant it a loan of 8 million Euros, the plaintiff asked the defendant parent company to guarantee the loan. The defendant refused, but gave a letter of comfort instead. This read: “It is our policy to ensure that the business of (the subsidiary) is at all times in a position to meet its liabilities to you under the loan facility arrangement”. The letter also stated that the defendant would not reduce their financial interests in the subsidiary company until the loan had been repaid. When during the negotiations the plaintiff learned that a letter of comfort would be issued rather than a guarantee, its response was that it would probably have to charge a higher rate of interest. When later the subsidiary company went into liquidation without having paid, the plaintiff brought an action against the defendant to recover the amount owing. The action failed since the defendant had not made a legally binding promise to pay the subsidiary’s debt. Illustration 2: Parent company M declares to a bank which lends money to its subsidiary company D that M is aware of D’s engagement towards the bank, that by all appropriate means it will see to it that D is able to meet its obligations towards the bank, and that it will give notice to the bank if it wishes to change this policy. Before M has given such notice to the bank D goes bankrupt. (a) Party bound by apparent intention “If, whatever, a man’s real intention may be, he so conducts himself that a reasonable man would believe that he was assenting to the terms proposed by the other party, and that the other party upon that belief enters into the contract with him, the man thus conducting himself would be equally bound as if he had intended to agree to the other party’s terms.” See also The Hannah Blumental, [1983] 1 A.C. 854 (H.L.) and Treitel, Contract 1; for IRISH law, see Friel 78 ff. In SCOTLAND the majority view is to the same effect. In Muirhead & Turnbull v. Dickson [1905] 7 S.C. 686, 694, Lord Dunedin said: “.. commercial contracts cannot be be arranged by what people think in their inmost minds. Commercial contracts are made by what people say.” See also McBryde, Contract 51-54 and 1992 Juridical Review 274; cf. Stewart, 1991 Juridical Review 216 and 1993 Juridical Review 83. (b) Subjective intention governs (c) Divided opinion Illustration 1: The owner of a large building employs a painting firm to repaint the “Exterior window frames”. The painters repaint the outside of the frames of the exterior windows and claim that they have finished the job; the owner claims that the inside surfaces of the frames to exterior windows should also have been painted. It is proved by the preliminary documents that the representatives of the owner and of the painting firm who negotiated the contract had clearly contemplated both surfaces being done. Although the normal interpretation might suggest that only the outside surfaces were within the contract, since exterior and interior decoration are usually done separately, the parties’ common intention should prevail. Illustration 2: A, a fur trader, offers to sell B, another fur trader, hare skins at £1.00 a kilo; this is a typing error for £1.00 a piece. In the trade skins are usually sold by the piece and, as there are about six skins to the kilo, the stated price is absurdly low. B nonetheless purports to accept. There is a contract at £1.00 per piece as A intended. Illustration 3: A clause in an insurance contract provides that the policy covers the theft of jewellery only if there has been “clandestine entry” into the place where the jewellery was. An individual, A, pretends to be a telephone repairman and presents himself at Madame B's home to repair her telephone. A distracts B with some pretext and takes the opportunity to steal her jewels. The insurance company refuses to pay up, on the basis that there has been no “clandestine entry”. On a reasonable interpretation entry gained by fraud is a form of “clandestine entry”. Illustration 1: A German manufacturer of office supplies has engaged B to represent A in the north of France. The contract is for six years but it may be terminated without notice if B commits a serious non-performance of its obligations. One of these obligations is to visit each of the 20 universities in the area “every month”. Assuming that this obligation applies only to the months, in the country concerned, when the universities are open and not to the vacations, B only visits each one 11 times a year, and A knows this from the accounts which are submitted to it by B. After 4 years A purports to terminate the contract for serious non-performance. Its behaviour during the four years since the conclusion of the contract leads to the interpretation that the phrase “every month” must be interpreted as applying only to the months when universities are active. Illustration 2: The manager of a large real estate development makes a fixed price contract with a gardening company for the maintenance of the 'green spaces'. The manager later complains that A has not repaired the boundary wall. The contract cannot be interpreted as covering this as it is a contract for gardening. Illustration 3: A has made a franchise contract with B. A clause provides that B shall pay for goods that he receives from A within 10 days. For a three month period B pays within 10 working days. Then A demands payment within ten days including holidays. The practice adopted by the parties indicates that this is not a correct interpretation. Illustration 4: A wine merchant from Hamburg buys 2,000 barrels of Beaujolais Villages from a co-operative cellar B. In Beaujolais a barrel contains 216 litres, whereas a Burgundian barrel contains more. A cannot claim that the barrels referred to in the contract are Burgundian barrels. Illustration 5: A film producer A and a distributor B make a distribution contract in which there is a clause providing for payment of a certain sum if the number of exclusive screenings (i.e. screenings only in a single cinema or chain of cinemas) is less than 300,000. A meant exclusive for the whole of France, B only for the Paris region. According to usages of the French film industry, exclusivity means exclusivity only in the Paris region. It is this meaning which applies. Illustration: An insurance contract contains a clause excluding losses caused by “floods”. The insurance company which drafted the contract cannot maintain that this exclusion applies to damage caused by water escaping from a burst pipe, since it has not made this clear. Illustration: A printed form is used for the conclusion of an option to purchase land. One of the clauses provides that the eventual buyer will deposit a cheque for 10% of the price with an intermediary until the option is either taken up or is refused. The parties agree to replace the requirement for a cheque with a bank guarantee. The intermediary writes this change on the margin of the document but omits to cross out the printed clause. The contradiction between the two clauses is to be resolved in favour of the hand-written clause. ![101 101](https://i.pinimg.com/736x/e5/3a/99/e53a99a2cb0260c497fef0ef98a37559--repetition-examples-principles-of-design.jpg)
Illustration: Miss A, an inexperienced singer, is taken on for six months by B, the manager of a cabaret on the Champs-Elysées. The contract contains a clause authorising the manager to end the contract in the first three days of the singer starting work. Another clause allows either party to determine the contract on payment of a significant sum of money as a penalty. Miss A is fired after one day and claims payment of the sum. Her claim should fail because the penalty clause is to be read in the light of the clause allowing determination within three days, which is a trial period. Illustration 1: Architect A assigns his practice to architect B and undertakes not to exercise his profession for five years “in the region”. If region is interpreted to mean the administrative region which contains several departments, the clause would be invalid as too wide. If region is interpreted in a less technical and more reasonable sense (a reasonable area) the clause will be valid and fully effective. Illustration 2: A grants B a licence to produce pipes by a patented method. B must pay a royalty of 500 BF per 100 metres if annual production is less than 500,000 metres and 300 BF if it is over 500,000 metres. To calculate the royalties on 600,000 metres, one can interpret the clause as fixing the price at 500 BF/m for the first 500,000 m and 300 BF/m for the remainder, or the rate of 300 BF/m could be applied to the whole quantity. The latter interpretation is not valid because it leads to an absurd result: the royalty for a production of 600,000 m. would be less than that for 400,000 m. Notes [Match -up with Continental and Common Law domestic rules, doctrine and jurisprudence]Illustration: A French business and a German business make a contract in French and in German. The contract contains an arbitration clause. The French text provides that the arbitrator 's'inspire' from the rules of the ICC, i.e. he may follow them. The German version provides 'er folgt', i.e. the arbitrator must follow the ICC rules. The French version was the original and this is the one which should prevail. © Pace Law School Institute of International Commercial Law - Last updated January 5, 2007Go to PECL Bibliography || Go to PECL Schedule of Abbreviations
Comments/Contributions
Principle 5 101 Principles
Start studying Chapter 5 Principles of Training. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Principle of training that dictates that overload should be increased gradually. Principle of specificity. The performance of specific exercises in order to improve specific components of physical fitness in specific body parts. OTHER SETS BY THIS CREATOR. Julius Caesar Vocab Act 5 10 terms. Business 101 consists of short video lessons that are organized into topical chapters. Each video is approximately 5-10 minutes in length and comes with a quick quiz to help you measure your learning.
GUIDE TO ARTICLE 8
Comparison with Principles of European Contract Law (PECL)
- Editorial remarks: Maja Stanivukovic [Yugoslavia]
- PECL comment and notes on the Principles cited
o Go below to PECL notes for Continental and Common Law comparatives - For other comparatives, go to
o Comparison with UNIDROIT Principles of International Commercial Contracts
o Comparison of CISG remedies with Latin American legal traditions
Know Your Purpose. Why do you backpack? Everyone who ventures into the wilds of the.
CISG Article 8 (1) For the purposes of this Convention statements made by and other conduct of a party are to be interpreted according to hisintent where the other party knew or could not have been unaware what that intent was. (2) If the preceding paragraph is not applicable, statements made by and other conduct of a party are to be interpretedaccording to the understanding that a reasonable person of the same kind as the other party would have had in the samecircumstances. (3) In determining the intent of a party or the understanding a reasonable person would have had, due consideration is to begiven to all relevant circumstances of the case including the negotiations, any practices which the parties have establishedbetween themselves, usages and any subsequent conduct of the parties. | PECL Article 2:102 [Intention] (complete and revised version 1998) The intention of a party to be legally bound by contract is to be determined from the party's statements or conduct as they were reasonably understood by the other party. PECL Article 5:101 [General Rules of Interpretation] (1) A contract is to be interpreted according to the common intention of the parties even if this differs from the literal meaning of the words.(2) If it is established that one party intended the contract to have a particular meaning, and at the time of the conclusion of the contract the other party could not have been unaware of the first party's intention, the contract is to be interpreted in the way intended by the first party.(3) If an intention cannot be established according to (1) or (2), the contract is to be interpreted according to the meaning that reasonable persons of the same kind as the parties would give to it in the same circumstances. Keycue 8 6 – displays all menu shortcut commands minecraft. See also the PECL provisions recited below |
The term 'reasonable' is encountered in CISG arts. 8(2) and (3), and in PECL arts. 2:102 and 5:101(3). For the PECL definition of 'reasonable', go to PECL art. 1:302 [Reasonableness] and the comment and notes that accompany this provision. Relevant to the phrase 'could not have been unaware of' encountered in PECL art. 5:101(2) is PECL art. 1:305 [Imputed Knowledge and Intention] and the comment and notes that accompany this provision.
Editorial remarks on the manner in which the PECL may be used to interpret or supplement CISG Article 8
1. The subject-matter of interpretation
2. Interpretation based on subjective standard (establishing the intention)
3. Interpretation based on objective standard (the criterion of a reasonable person)
4. Auxiliary criteria of interpretation
5. Specific rules of interpretation
b. Nowhere does the Convention mention the interpretation of the contract, however,but rather speaks of interpretation of unilateral statements and conduct of each party(see, Art. 8 paras. (1) and (2): 'statements made by and other conduct of a party are tobe intepreted').[2] In contrast, the Principles expressly state that the contract is thesubject matter of interpretation (see, Art. 5:101 para. (1): 'a contract is to beinterpreted', para. (2): 'that one party intended the contract to have a particularmeaning', 'the contract is to be interpreted', para. (3) 'the contract is to be intepreted').It is beyond doubt, however, that Art. 8 CISG is also concerned with interpretation ofthe contract,[3] no matter whether it is a contract made through an exchange ofcommunications, or a single instrument supplied by one party and accepted by theother, or drafted and signed by both parties jointly, or a contract concluded in someother way.[4] This difference between CISG and PECL is in expression and emphasisonly. The European Principles are more bilaterally oriented in their formulation,starting from the common intention of the parties,[5] and finishing by applying thestandard of reasonableness to both parties,[6] while the Convention concentrates oncases in which one party has had a more active role in the preparing of the contractualinstrument. In Art. 8, the Convention puts stress on the intention of each individualparty, and on the understanding that the other party would have attributed to itsstatements and conduct.[7] Although the Principles, too, allow for the possibility of oneparty's intention to prevail, even when different from the literal meaning of the words,this figures as an exception to the general rule of mutual intention.[8] The practicalimportance of this difference may appear in the case of contracts in which both partiesfully participated in the drafting of the contractual instrument. Paragraphs (1) and (2)of Art. 8 CISG would seem to be inapplicable to such an instrument, because theydifferentiate between the one who makes a statement and the one who receives it,[9]while Art. 501 PECL would be fully applicable. One reason for the different approachin formulation probably lies in the history of the Art. 8 provision of CISG. If one keepsin mind the fact that this provision originated from the Commission draft on formationof contracts where it was used for interpretation of offer and acceptance, and becameapplicable to statements and conduct after formation of the contract only later, whenthe two drafts on formation and sales were merged, its one-party orientation becomesunderstandable.[10] The second reason for this difference probably lies in thepredominance of the theory of mutual intent as the basis of contract in the majority ofthe laws of European states whose lawyers participated in the drafting of the PECL.[11]Such a unison view of the basis of contract did not exist among the member states ofUNCITRAL.[12]
c. The rules on interpretation of contract, i.e., of the parties' statements and conductconstituting the contract, are necessary when the meaning of certain provisions isambiguous, or when the different clauses of a contract contradict each other.[13] Theinterpretation of unclear or contradictory provisions may be necessary in order todetermine whether the contract came into existence, what is its content, and what isthe effect of certain notices or other acts of parties upon the performance or existenceof the contract.[14] One of the purposes that the rules on interpretation have to serve -determination whether a contract has been concluded - has been treated by a separateprovision in the PECL, Art. 2:101, thus giving rise to another formal differencebetween the CISG and PECL. The Principles state in Art. 2:101 that a party's intentionto be legally bound, as a condition for concluding a contract under Art. 2:101(1)(a),shall be determined on the basis of that party's statements and conduct, i.e., whetherthese statements or that conduct gave the other party a reason to believe that the firstparty wanted to be legally bound. This provision is clearly more inclined to theobjective standard of interpretation (see infra, f). However, in their Notes, the PECLCommentators refer judges and arbitrators to the whole set of rules of interpretationcontained in chapter 5 (with subjective standard inclusive) in determining whether theparty to whom statement or other conduct was addressed had reason to assume thatthe first party intended to be bound.[15] The CISG does not dedicate a particularprovision to this purpose, but instead, relies on Art. 8, an all-embracing provision,which applies to interpretation of all statements and conduct of the parties, eitherduring the formation of contract, or during its performance and possible termination.Professor Honnold points out that this article has an even wider scope, because itapplies also to post-contract communications and actions.[16]
d. There is an obvious difference in the type of contract to which these rules canpossibly be applied. While Art. 8 CISG is to be applied only to interpretation ofcontracts for the international sale of goods, this being further limited by the exclusionof certain international sales by the Convention text itself, the purpose of theinterpretation rules contained in Chapter 5 of PECL is much wider, i.e., they areintended to serve for interpretation of 'any sort of contract,'[17] including contracts forthe international sale of goods.
e. The basic similarity between CISG and PECL rules on interpretation of contractslies in the combination of the subjective and objective methods of interpretation. Boththe Convention (Art. 8(1) CISG) and the Principles (Arts. 5:101(1) and 5:101(2)PECL) instruct the judge or arbitrator to start by establishing the intention of theparties. But, as indicated above, the PECL wants judges and arbitrators to primarilylook for their common intention (Art. 5:101(1)), and only exceptionally to interpret thecontract in the way intended by one party (Art. 5:101(2)), while the CISG does notrefer to the common intention of the parties at all, but only to intent of an individualparty. There are some further differences in the wording of the respective rules. Forexample, PECL in Art. 5:101(2) elegantly avoids the repetitive and tautological natureof the formula used in the CISG to describe the awareness that one party had of theother party's particular intent: 'where the other party knew or could not have beenunaware what that intent was.'[18] Instead, the PECL simply states: '[if] the other partycould not have been unaware of the first party's intention.' Further, the PECL specifiesthe relevant moment for assessment of the other party's awareness - this is the momentof conclusion of the contract. Such precision is lacking in CISG Art. 8, perhapsnaturally, since it refers more broadly to interpretation of statements and conduct of aparty whenever they were given or undertaken.
g. Both the Convention and the Principles give the judge or arbitrator a non-exhaustivelist of matters which may be relevant in determining either the meaning intended by theparties or the reasonable meaning of the contract (see Art. 8(3) CISG and Art. 5:102PECL).[19] The PECL list is more comprehensive. If we make a close comparison ofrelevant factors, we notice that the Convention does not mention the following: goodfaith and fair dealing, the nature and purpose of the contract, the interpretation whichhas already been given to similar clauses by the parties, the meaning commonly givento terms and expressions in the branch of activity concerned and the interpretation thatsimilar clauses may have already received. Surely, most of these factors may also betaken into account when applying the auxiliary interpretation rule from CISG Art. 8,para. (3).
h. Some may question, however, whether good faith and fair dealing could be used asa tool of interpretation of a contract governed by the Convention, because of the well-known fact that the proposals for imposition of this requirement upon parties and theirconduct were expressly rejected during the drafting process.[20] In spite of suchlegislative history of the Convention text, it has become commonplace amongcommentators of the CISG to mention the observance of good faith by the parties as ageneral principle on which the Convention is based.[21] If this view is accepted, theprinciple of good faith and fair dealing could also serve as a potential auxiliary factor ininterpretation of the parties' statements, conduct and contractual provisions in general,even though it is not expressly mentioned in the relevant article of the CISG, as it is inthe PECL.
i. Both Art. 8(3) CISG and Art. 5:102 PECL include preliminary negotiations as oneamong the factors to be taken into account by the judge or arbitrator interpreting thecontract. This is generally understood to mean that the parol evidence rule existing insome legal systems is precluded.[22] Even a merger clause possibly inserted into thecontract, does not automatically bar the judge from considering any evidence ofpreliminary negotiations for purposes of interpretation, under either of theseinstruments.[23] The parties wishing to exclude such evidence for all purposes, includingthe purposes of interpretation, can still do so, however, by stating accordingly in themerger clause. This would be a derogation from Art. 8(3) CISG and Art. 5:102 PECL,which is allowed on the basis of party autonomy (see Art. 6 CISG; Art. 1:102(2)PECL).[24]
j. The Convention does not frame any rules on interpretation other than the generalrule contained in Art. 8 CISG. In contrast, the PECL contain five such specific rules ofinterpretation: the contra proferentem rule (Art. 5:103), the rule on giving preferenceto negotiated terms (Art. 5:104), the rule on interpreting the individual provisions withreference to contract as a whole (Art. 5:105), the rule on giving preference tointerpretation which renders the terms of contract effective (Art. 5:106), and the ruleon interpretation in case of linguistic discrepancies (Art. 5:107). Undoubtedly, thesespecific rules may be referred to as supplementary rules in aid of interpretation of theCISG, because they are not inconsistent with, and are in accord with the evident intentof, Art. 8 CISG. Indeed, some of these rules are described as the origin of solutionsadopted in Art. 8.[25] They are an absolute necessity for interpretation of contracts madein an international and, often, multilingual setting.
[See also commentary by the author on this subject in: John Felemegas ed., An International Approach to the Interpretation of the United Nations Convention on Contracts for the International Sale of Goods (1980) as Uniform Sales Law, Cambridge University Press (2006) 272-277.] Text bar 3 2 1826.
FOOTNOTES
3. This is borne out by the emerging case law on the CISG. As of the date of this analysis, the cisgw3 website reports 900 cases <http://www.cisg.law.pace.edu/cisg/text/casecit.html> [viewed 9 March 2002], cases which reflect an abundance of express or implicit attention to Art. 8 CISG by judges and arbitrators, including rulings which draw on this provision to assist in the interpretation of the contract as well as the intention of the parties.
4. Secretariat Commentary on Art. 7 of the 1978 Draft, Official Records, p. 18, paragraph 2; J.Honnold, Uniform Law for International Sales under the 1980 United Nations Convention, SecondEdition, Kluwer Law and Taxation Publishers, Deventer, Boston 1991, p. 163; J.S. Ziegel, Report tothe Uniform Law Conference of Canada on Convention on Contracts for the International Sale ofGoods, Commentary of Art. 8, para. (3), available at <http://www.cisg.law.pace.edu/cisg/text/ziegel18.html>.
20. For a detailed comparative commentary on the role of good faith in the three instruments -- the CISG, the PECL and the UNIDROIT Principles -- see Guide to Article 7 CISG, editorial remarks by J. Felemegas and U. Magnus, available online at the Pace Institute website at <http://www.cisg.law.pace.edu/cisg/text/e-text-07.html>.
22. J. Honnold, op. cit., p. 171; Comparative guide to Art. 8, editorial remarks by J.M. Perillo, item g)<http://www.cisg.law.pace.edu/cisg/principles/uni8.html#edrem>. See MCC-Marble CeramicCenter, Inc. v. Ceramica Nuova D'Agostino, S.p.A. , U.S. Court of Appeals (Eleventh Circuit), 29June 1998, CLOUT Case no. 222, also available at<http://cisgw3.law.pace.edu/cases/980629u1.html>.
See apparently contra,Beijing Metals & Minerals Import/Export Corporation v. American BusinessCenter, Inc., U.S. Court of Appeals (Fifth Circuit), 15 June 1993, CLOUT Case no. 24, alsoavailable at <http://cisgw3.law.pace.edu/cases/930615u1.html>.
However, in Mitchell Aircraft Spares v. European Aircraft Service, U.S. District Court [Illinois], 27October 1998, CLOUT no. 419, the court confirmed the growing body of U.S. jurisprudence to theeffect that, in a case governed by the Convention, Article 8 CISG displaces the U.S. parol evidencerule. See <http://cisgw3.law.pace.edu/cases/981027u1.html>.
[See also, Calzaturificio Claudia v. Olivieri Footwear, 6 April 1998 U.S. District Court [New York],CLOUT case no. 413, also at <http://cisgw3.law.pace.edu/cases/980406u1.html>; Filanto S.p.A. v. Chilewich International Corp., 14 April 1992 U.S. Dist. Ct., CLOUT case no. 23,also at <http://cisgw3.law.pace.edu/cases/920414u1.html>.]
The court in Mitchell Aircraft also disagreed with the possible holding to the contrary in BeijingMetals & Minerals; see A.H.Kritzer's editorial comments in the Mitchell Aircraft case presentationonline, id.
Comment and notes on PECL 2:102 and 5:101 through 5:107Like the commentary to the UNIDROIT Principles and the U.S. Restatements, the comments to the PECL help explain the text. The PECL notes identify civil law and common law antecedents and related domestic provisions. With the permission of the Commission on European Contract Law, these comments and notes are presented below. The source of this material is Ole Lando & Hugh Beale eds., Principles of European Contract Law: Parts I and II, Kluwer Law International (2000)143-146, 287-298.
- Comment and notes on PECL Article 5:101
M’s letter of comfort is to be considered as a guarantee which obliges M to pay D’s debt.
In contrast to most other laws, FRENCH law will only hold a person bound in contract if it is his real intention to be bound, see Malaurie & Aynès, Obligations nos. 347 ff. However, a party alleging that, contrary to his statement, he had no intention to be bound must make this allegation plausible. If he succeeds he is not contractually bound, but may be held liable in damages in tort if he has acted negligently, see Terré, Simler et Lequette, Obligations no. 87, no. 131. The same rules apply in LUXEMBOURG. PORTUGUESE CC arts. 245 and 246 impose liability on a person who acted negligently when making a statement which he did not mean seriously or when making a statement unconsciously, see (a) above.
Principle 5 101 Dalmatians
In BELGIUM there is one school which sticks to the traditional FRENCH 'doctrine of the intention', see e.g. Verougstraete 1195-96, and another school which will apply the same rule as the one in Article 2:102, see van Ommeslaghe, R.D.I.D.C. 1983 144 and M.E. Storme, Tijdschrift voor belgisch burgerlijk recht 1993, 336. The rule in Article 2:102 has been applied by the Cour de Cassation in a decision of 20 June 1988, Pas. 1988 I 1256, where it was held that a principal was bound by an act done by the agent when the third party had reason to rely on the agent’s apparent authority; see also Court of Appeal of Brussels 26 May 1996, Tijdschrift voor belgisch burgerlijk recht 1996, 333 where the rule was also applied. [page 146]
Go to PECL Abbreviations || Go to PECL Bibliography || Go to full texts of Parts I & II of Principles of European Contract Law
COMMENT AND NOTES: PECL Article 5:101: General Rules of InterpretationGo to PECL Abbreviations || Go to PECL Bibliography || Go to full texts of Parts I & II of Principles of European Contract Law
COMMENT AND NOTES: PECL Article 5:102: Relevant CircumstancesGo to PECL Abbreviations || Go to PECL Bibliography || Go to full texts of Parts I & II of Principles of European Contract Law
COMMENT AND NOTES: PECL Article 5:103: Contra Proferentem RuleGo to PECL Abbreviations || Go to PECL Bibliography || Go to full texts of Parts I & II of Principles of European Contract Law
COMMENT AND NOTES: PECL Article 5:104: Preference to Negotiated TermsPrinciple 5 101 Math
COMMENT AND NOTES: PECL Article 5:105: Reference to Contract as a WholeTerms are to be interpreted in the light of the whole contract in which they appear.
Comment
![101 101](https://i.pinimg.com/736x/e5/3a/99/e53a99a2cb0260c497fef0ef98a37559--repetition-examples-principles-of-design.jpg)
It is reasonable to assume that the parties meant to express themselves coherently. It is thus necessary to interpret the contract as a whole and not to isolate clauses from each other and read them out of context. It must be presumed that the terminology will be coherent; in principle, the same term should not be understood to have different meanings in different parts of the same contract. The contract must be interpreted in a way that gives it basic coherence, so that the clauses do not contradict each other.
There is normally no particular hierarchy between the elements of a contract, save under special circumstances: for example, particular emphasis should be given to any definition of terms or to a preamble which could have been introduced into the contract.
Article 5:105 may also be applied to groups of contracts. For example one can treat a frame-work (master) contract and the various contracts made under it as a whole. By the “whole contract” must be understood the “whole group of contracts”.
Adobe photoshop elements 15 2. Notes [Match-ups with Continental and Common Law domestic rules, doctrine and jurisprudence]
This rule is stated in a number of texts: ITALIAN CC art. 1363; FRENCH, BELGIAN and LUXEMBOURG CCs art. 1161; SPANISH CC art. 1285; UNIDROIT art. 4.4. In PORTUGAL it is found in Law 446/1985 of 15 October 1985 and has been extended to all contracts. It is also found in NORDIC law: Swedish Supreme Court, NJA 1990, 24; for Denmark, see Lynge Andersen, 357 ff. The rule is also found in English law, see Chitty §§ 12-053 - 12-059 and refs. there, SCOTTISH, GERMAN, AUSTRIAN and GREEK law.
The illustration is inspired by French Cass. soc. 7 March 1973, B 73 V no. 145. [page 296]
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COMMENT AND NOTES: PECL Article 5:106: Terms to Be Given EffectThe rule in favour of full effect is to be found in several codes: FRENCH, BELGIAN and LUXEMBOURG CCs art. 1157; ITALIAN CC art. 1367; SPANISH CC art. 1284. See also indirectly PORTUGUESE CC art. 237. It is adopted by UNIDROIT art. 4.5. It is recognised by case law in GERMANY, BGH 3 March 1971, NJW 1971, 1035; AUSTRIA, OGH 4 December 1985, JBl 1987, 378; ENGLAND, e.g. NV Handel Smits v. English Exporters Ltd [1955] 2 Lloyd’s Rep. 317, C.A.; Chitty § 12-064. IRISH and SCOTS law are similar. For DANISH law see Lynge Andersen 377 ff.; for FINLAND, Hoppu 47; for SWEDEN, Ramberg, Avtalsrätt 178.
It should be noted that for the purposes of Article 7(2), collective action, of the Directive on Unfair Terms in Consumer Contracts of 5 April 1993 (93/13/EEC), the interpretation in favour of full effect is not applied because in this case the article intends to strike down abusive clauses.
Principle 5 101 Quizlet
Illustration 2 is taken from Restatement of Contracts 2d, § 206, comment (c). [page 297]
COMMENT AND NOTES: PECL Article 5:107: Linguistic DiscrepanciesComments/Contributions
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