Chapter 4 - Interpretation

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Chapter 4 - Interpretation

Article 4.1 - Intention of the Parties

(1) A contract shall be interpreted according to the common intention of the parties.

(2) If such an intention cannot be established, the contract shall be interpreted according to the meaning that reasonable persons of the same kind as the parties would give to it in the same circumstances.

Article 4.2 - Interpretation of Statements and Other Conduct

(1) The statements and other conduct of a party shall be interpreted according to that party?s intention if the other party knew or could not have been unaware of that intention.

(2) If the preceding paragraph is not applicable, such statements and other conduct shall be interpreted according to the meaning that a reasonable person of the same kind as the other party would give to it in the same circumstances.

Article 4.3 - Relevant Circumstances

In applying Articles 4.1 and 4.2, regard shall be had to all the circumstances, including

  • (a) preliminary negotiations between the parties;
  • (b) practices which the parties have established between themselves;
  • (c) the conduct of the parties subsequent to the conclusion of the contract;
  • (d) the nature and purpose of the contract;
  • (e) the meaning commonly given to terms and expressions in the trade concerned;
  • (f) usages.

Article 4.4 - Reference to Contract or Statement as a Whole

Terms and expressions shall be interpreted in the light of the whole contract or statement in which they appear.

Article 4.5 - All Terms to be Given Effect

Contract terms shall be interpreted so as to give effect to all the terms rather than to deprive some of them of effect.

Article 4.6 - Contra Proferentem Rule

If contract terms supplied by one party are unclear, an interpretation against that party is preferred.

Article 4.7 - Linguistic Discrepancies

Where a contract is drawn up in two or more language versions which are equally authoritative there is, in case of discrepancy between the versions, a preference for the interpretation according to a version in which the contract was originally drawn up.

Article 4.8 - Supplying an Omitted Term

(1) Where the parties to a contract have not agreed with respect to a term which is important for a determination of their rights and duties, a term which is appropriate in the circumstances shall be supplied.

(2) In determining what is an appropriate term regard shall be had, among other factors to

  • (a) the intention of the parties;
  • (b) the nature and purpose of the contract;
  • (c) good faith and fair dealing;
  • (d) reasonableness.

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Preamble - Purpose of the Principles 

Chapter 1 - General Provisions

Chapter 2 - Formation

Chapter 3 - Validity 

Chapter 4 - Interpretation

Chapter 5 - Content

Chapter 6 - Performance 

Chapter 7 - Non-Performance 

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Principles of International Commercial Contracts