Article 1: When people's courts interpret contract terms on the basis of the provisions of the first paragraph of article 142 and the first paragraph of article 466 of the Civil Code, they shall determine the meaning of the disputed clause on the basis of the ordinary meaning of the words and sentences, in consideration of the relevant clauses, the nature and purpose of the contract, customs, and the principle of good faith, and with reference to factors such as the background of the contract, the negotiation process, and the performance conduct.
Where there is evidence to prove that the parties have other common understandings of the terms of the contract that are different from the ordinary meanings of the words and sentences, and one party claims to understand the terms of the contract in accordance with the ordinary meaning of the words and sentences, the people's court will not support it.
Where there are two or more interpretations of a contract clause that may affect the validity of the clause, the people's court shall choose an interpretation that is conducive to the validity of the clause; If it is a gratuitous contract, the interpretation that is less burdensome to the debtor should be chosen.
【Purpose of the Article】
This article is a supplementary and detailed provision on the rules for the interpretation of contract clauses.
【Overview of Provisions】
Article 142 of the Civil Code establishes the basic rule for the interpretation of the expression of intent by the counterpart, that is, "the meaning of the expression of intent shall be determined in accordance with the words and phrases used, in combination with the relevant provisions, the nature and purpose of the act, the custom, and the principle of good faith". On the basis of the existing provisions of the Civil Code, paragraph 1 of this article further clarifies that in the process of contract interpretation, the meaning of the disputed clause shall be determined on the basis of the ordinary meaning of the words and sentences, combined with the relevant clauses, the nature and purpose of the contract, the custom, and the principle of good faith, with reference to factors such as the background of the contract, the negotiation process, and the performance behavior", and clarifies the rules of contract interpretation that unify subjectivity and objectivity. Paragraph 2 introduces the rule of innocuous true intent, providing that where there is evidence of a common understanding between the parties of the terms of the contract that is different from the ordinary meaning of the words, the true intention of the parties shall be determined in accordance with that common understanding. The first half of paragraph 3 stipulates the rule of legal interpretation, that is, if there are two or more interpretations of a contract clause that may affect the validity of the clause, the people's court shall choose an interpretation that is conducive to the validity of the clause; The second half of the sentence provides for a rule of interpretation in favour of the debtor, that is, if there are two or more interpretations of the terms of the gratuitous contract, the interpretation that is less burdensome to the debtor should be chosen.
【Controversial Views】
With regard to the basic rules of contract interpretation, article 142 of the Civil Code stipulates that "the meaning of the expression of intent shall be determined in accordance with the words and phrases used, taking into account the relevant clauses, the nature and purpose of the act, customs and the principle of good faith". However, in academic and judicial practice, there is still some controversy over whether to adopt an objectivist or subjective stance in contract interpretation. The first view is that the Civil Code does not completely change the rules of subjective interpretation of the Contract Law. According to this view, the purpose of contract interpretation is to discover and explore the true intention of the parties to the contract, and when exploring the true intention of the parties to the contract, the subjective meaning should be determined from the perspective of the situation at the time of the conclusion of the contract, that is, the interpretation of the contract should be based on the true intention of the parties at the time of entering into the contract. In order to accurately ascertain the true intentions of the parties, the information in the process of contracting and the course of the parties' dealings should be taken into account. The second view is that objectivist rules of interpretation should be adopted. According to this view, an objective stance should be adopted in the interpretation of the contract, and when the expression of intention is inconsistent with the inner intention, the external expression should prevail. As for the true intention of the parties to the contract, it is not the purpose of the interpretation of the contract. That is, from the external expression of the parties, according to the principle of good faith, the interpretation of the parties' intentions is based on this standard. The third point of view is that for the interpretation of the expression of the intention of the counterpart, it is necessary to consider not only the true inner meaning of the expressor, that is, the subjective thoughts, but also the trust and interests of the counterpart, that is, the objective situation. Objectivism as the mainstay, supplemented by subjectivism, is one of the principles that should be adopted in the interpretation of contracts in mainland China. It is generally believed that Article 142 of the Civil Code of the People's Republic of China actually adopts a unified interpretation position of subjective and objective. Paragraph 1 provides that the interpretation of an expression of intent by a counterpart "shall be combined in accordance with the words and phrases used...... determine the meaning of the expression of intent", and paragraph 2 provides that the interpretation of the expression of intent without a counterpart "cannot be completely confined to the words and phrases used, but should be combined...... to determine the true intention of the perpetrator". It can be seen from the comparison that in the field of interpretation of contracts and other expressions of intent of the counterparty, the role of words and sentences should be highlighted, rather than directly exploring the true meaning of the actor. However, the role of prominent words and phrases should not be excluded from other methods of interpretation, but should be considered together with other methods of interpretation, in order to achieve a balance between autonomy of meaning and protection of trust.
[Understanding and Application]
The rules of contract interpretation are judicial rules that need to be widely used by the people's courts when hearing contract dispute cases. Some extraterritorial legislation attaches great importance to the issue of contract interpretation, such as the Italian Civil Code, the United Nations Convention on Contracts for the International Sale of Goods and the General Principles of International Commercial Contracts. Paragraph 1 of Article 466 of the Civil Code cites Article 142 as the interpretation rule of contract interpretation, which is of great significance to judicial practice. However, this provision is relatively principled, and there is still some controversy in its application, and further refinement is necessary.
1. The basic position of contract interpretation
The basic position of contract interpretation is divided into objectivism (also known as representationism) and subjectivism (also known as meaningism), the former focuses on protecting the intention expressed by the parties (in favor of the counterparty), and the latter focuses on protecting the true intention of the parties. [6] Traditional civil law legislation often adopts a subjective position, believing that the true meaning of the parties should be explored, such as article 1156 of the French Civil Code and article 133 of the German Civil Code. Because subjectivism ignores the protection of the trust interests of the counterpart, it has been criticized by many people. Since the end of the 19th century, civil law in civil law systems has also paid more and more attention to the objective meaning of the expression of intent, that is, the objective content of the external expression. In modern times, both subjectivist and objectivist monism have tended to transform into dualism that combines subjectivity and objectivity. After all, a purely subjective approach would seriously affect or even undermine legal certainty and commercial security, while a purely objective approach would be tantamount to denying the fundamental position of the principle of freedom of contract. As a result, the legal systems of modern countries often seek the right balance between these two approaches. For example, the provisions of §§ 133 and § 157 of the German Civil Code (BGB) combine subjective and objective interpretation. Before 2016, Article 1156 of the French Civil Code adopted the principle of meaning doctrine, and Article 1188, paragraph 1 of the French Civil Code, as amended in 2016, adopted the doctrine of meaning, and paragraph 2 stipulates that if it is impossible to ascertain the true intention of the parties, the content of the contract shall be determined according to the meaning assigned to the contract by a reasonable person in the same context, which reflects the spirit of objectivism. In contrast to the civil law system, English law initially adopted objectivist monism and interpreted contracts strictly in accordance with the literal meaning, but in recent years, it has gradually paid attention to exploring the parties' contractual intentions. In addition, international trade rules such as article 8, paragraphs 1 and 2, of the United Nations Convention on Contracts for the International Sale of Goods and article 4.1, paragraphs 1 and 2, of the Principles of International Commercial Contracts also mostly adopt a binary model combining subjective and objective interpretation.
Position on the interpretation of the continental contract. Paragraph 1 of Article 125 of the Contract Law stipulates that: "If the parties have a dispute over the understanding of the terms of the contract, they shall determine the true meaning of the terms in accordance with the words and phrases used in the contract, the relevant terms of the contract, the purpose of the contract, the trading habits and the principle of good faith." Article 142 of the Civil Code is a successor to the General Provisions of the Civil Law, which stipulates that: "The interpretation of the expression of intent by the counterpart shall be determined in accordance with the words and phrases used, combined with the relevant provisions, the nature and purpose of the act, the customs, and the principle of good faith." Interpretations without the expression of intent of the counterpart should not be completely confined to the words and phrases used, but should be combined with the relevant provisions, the nature and purpose of the act, customs, and the principle of good faith to determine the true intention of the actor. "It has been argued that paragraph 1 of the same article provides that the purpose of interpretation of the expression of intent by the counterpart is to "determine the meaning of the expression of intent" rather than "to determine the true intention of the actor", and the principle of objectivist interpretation should be considered to be adopted. There is also a view that in contract interpretation, for the sake of the protection of the counterparty's trust, although priority should be given to the objective meaning of the ideogram, the subjective content given to the ideographer by the ideographer can still become the content of the expression of intent under certain premises. The "meaning of the expression of meaning" includes both the objective meaning of the ideogram and the meaning understood by the ideographer, i.e., the subjective meaning. It is generally believed that the expression of intent of a counterparty involves the protection of trust of the counterparty, and it is necessary to maintain a balance between private law autonomy and trust protection, so the interests of the expressor and the counterpart must be taken into account when interpreting the expression of intent. Therefore, objectivism is the mainstay, supplemented by subjectivism, which is one of the principles that should be adopted in the interpretation of contracts in mainland China. Article 142 of the Civil Code of the People's Republic of China actually follows this line of thought, emphasizing that in the field of interpretation of contracts and other expressions of intent of the counterparty, the role of words and sentences should be highlighted, rather than directly exploring the true meaning of the actor. In view of the long-term impact of the civil law tradition on the mainland, and the position of the Civil Code on the interpretation of the expression of intent in the Civil Code of the mainland is completely different from that of the traditional civil law, it is necessary to clarify this issue. Therefore, paragraph 1 of this article stipulates that the interpretation of a contract shall be "based on the ordinary meaning of words and phrases", that is, it clarifies that the objectivist position should be fundamental in the interpretation of the contract.
2. Methods of contract interpretation
(1) Literal interpretation
1. The basic position of literal interpretation
The terms of the contract are composed of words and words, and the inner meaning of the parties is revealed through words, language and other carriers, which are an important basis for finding out the true intentions of the parties. Therefore, when interpreting a contract, it is necessary to understand the words and phrases used and determine the meaning of the words. The words and sentences of the contract are determined by both the expressor and the counterparty, and the interpretation of the expression of intent of the counterparty involves the protection of the counterparty's trust interests, so it is absolutely impossible to make a completely subjective interpretation of the expression of intent without the words and sentences. The majority of scholars agree with the basic position of literal interpretation in the interpretation of the expression of intent with a counterpart. For example, Professor Wang Liming believes that when the parties have a dispute over the meaning of a contract clause, the clause should first be interpreted in accordance with the method of literal interpretation. Professor Cui Jianyuan believes that the interpretation of a contract must first start with the meaning of the text. In practice, the relevant adjudication cases of the Supreme People's Court also hold this view. Based on the above opinions, paragraph 1 of this article, on the basis of the provisions of the Civil Code, further emphasizes the basic position of literal interpretation in the interpretation of the expression of intent of the counterpart, that is, it should be based on the ordinary meaning of the words and sentences used in the disputed clause determined by the literal interpretation method, and the test shall be carried out in combination with systematic interpretation, purpose interpretation, customary and other methods.
2. Standards of literal interpretation
There is a view that when the parties have different understandings of the terms of the contract, the court should use a reasonable person's understanding of the terms of the contract in the context of the conclusion of the contract to explore the meaning of the terms of the contract. It is generally accepted that a rational person is a person who has an intermediate level of mental capacity, knowledge, and experience. As a virtual subject, the understanding of the rational person is a fictitious understanding. If it is an ordinary civil activity, then the rational person is a person in general; If it's a special deal, it's someone in the field. In a specific transaction, it is also necessary to examine factors such as the complexity of the transaction, the ability of the group to which the rational person belongs, the language ability of the parties in the cross-border transaction, and the religious and cultural background, legal and policy background of the parties to make a judgment. The view of understanding contract terms from the perspective of a rational person is in line with the objectivist position of contract interpretation adopted in Article 142 of the Civil Code. Therefore, paragraph 1 of this article clearly states that objective standards should be adopted for literal interpretation, with reference to the provisions of the United Nations Convention on Contracts for the International Sale of Goods, the General Principles of International Commercial Contracts, etc., which stipulate that "the ordinary meaning of words and phrases shall be based". The so-called interpretation according to the ordinary meaning of words and sentences refers to the understanding made by a reasonable person based on a relatively objective standard, based on the literal interpretation, combined with the specific transaction background, and the comprehension ability of a reasonable person. It should be noted that if the phrase is a general term, it should be understood in its ordinary sense; If the phrase is a technical term, it should be understood in terms of its specific professional meaning. If both parties have expressly agreed that a certain meaning is expressed in the terms of the contract, it shall be interpreted in accordance with the meaning mutually accepted by both parties. In addition, when interpreting a contract in terms of a reasonable person's understanding of the terms and phrases of the contract in the context in which the contract is concluded, various factors should be fully considered, such as the negotiation process, the habits of the transaction, the preparation for performance and the process of performance. The Draft Judicial Interpretation has provided that it is "based on the meaning of words and phrases understood by ordinary persons under the same circumstances", and there are opinions that the meaning of "ordinary persons" is not clear, and in many cases, commercial entities engage in transactions between parties, and the parties are professional and senior enterprises in the relevant field, and in this case, the contract must be based on the understanding of ordinary people in specific transaction situations, and cannot be understood on the basis of the so-called natural persons in the general sense, and the term "ordinary persons" may not cover such situations. In order to avoid misunderstanding, this judicial interpretation ultimately does not use the term "ordinary person" and is revised to the current expression.
(2) Other methods of interpretation
1. System explanation
Systematic interpretation, also known as holistic interpretation, refers to the determination of the meaning of the disputed expression of intent based on various factors such as the interrelatedness of all aspects, the relationship between the disputed clause and the true expression of intent of the parties, and the position of the disputed clause in the expression of intent as a complete whole. The principle of overall interpretation is embodied in the following aspects: First, systematic interpretation requires that the interpretation of the expression of intent should not be limited to the literal meaning of the expression of intent, nor should it only consider the information of a certain expression of intent, let alone take the words and phrases of the expression of intent as the true intention of the parties and take them out of context, but should comprehensively consider all kinds of materials related to the expression of intent. Second, system interpretation requires that the content and meaning of the expression of intent disputed by the parties be understood, analyzed and explained from the entire content of the expression of intent. For example, if several clauses in a contract conflict with each other, these clauses should be integrated and the intention of the parties should be considered according to the nature of the contract, the purpose of the contract, etc., and in particular, the language and words used by the parties in the contract must be examined in conjunction with each other, and the meaning of each sentence or word cannot be explored in isolation. If the contract consists of letters, telegrams or even memoranda, the material should be interpreted as a whole when determining the meaning of a clause. Finally, if the parties use more than one language to express the same expression, it can be presumed that the words and phrases used in each text have the same meaning, even if the parties have not specifically agreed on the relationship between the various expressions of meaning.
2. Purpose Interpretation
The so-called purpose interpretation refers to the interpretation of the disputed expression of intent according to the purpose to be achieved by the parties when they make the expression of intent. In accordance with the principle of autonomy of private law, civil subjects may express their intentions to achieve their goals within the scope prescribed by law, and create, modify, and terminate civil rights and obligations through the agreement of both parties. The parties engaged in civil juristic acts must achieve a certain purpose, and the expression of intent itself is only a means for the parties to achieve the goal. Therefore, when interpreting the expression of intent, full consideration should be given to the purpose of the parties engaging in civil juristic acts. According to the rule of purposive interpretation, if the meaning of the words and phrases used in the relevant text is contrary to the purpose expressly expressed by the parties, and the parties dispute the provision, in such a case, it is not necessary to be completely confined to the words, and the interpretation can be carried out in accordance with the purpose of the parties. Therefore, when applying the rule of purpose interpretation, the purpose of the parties should first be explored and the purpose to be achieved when making the expression of intent. In the event of any discrepancy between the literal interpretation and the purposive interpretation, the latter shall prevail.
3. Habit explanation
Customary interpretation means that after a dispute arises over the expression of intent, the expression of intent should be interpreted according to the life and trading habits known or practiced by the parties. Generally speaking, the clauses of a disputed contract are mainly interpreted in a contract according to trading customs, mainly because the contract is essentially a transaction. The Contract Law has provided that if a dispute arises over the terms of a contract, the loopholes and the interpretation of the expression of intent should usually be followed by transaction customs. This rule is recognized by the laws of many countries, and the mainland is no exception. However, when using trading habits to fill the loopholes in the expression of intent, the existence and content of various trading customs should be proved by both parties. In the event that the parties fail to provide evidence to prove the trading habits, the judge may also choose a certain custom to fill the loophole in the expression of intent according to his own understanding of the trading habits. Trading habits can be used not only to fill gaps in the expression of intent, but also to interpret the meaning of contract terms.
4. Interpret in accordance with the principle of good faith
Interpretation based on the principle of good faith means that after a dispute arises over the interpretation of an expression of intent, the principle of good faith shall be used to fill in the loopholes in the expression of intent and interpret the disputed expression of intent. Interpretation based on the principle of good faith actually requires the judge to judge and understand the content of the expression of intent and the meaning of the clause as an honest and trustworthy party. It is for this reason that the interpretation based on the principle of good faith has led to a tendency to socialize the interpretation of the expression of intent. When a judge interprets an expression of intent based on the principle of good faith, he or she will apply business ethics and public morality to the interpretation of the expression of intent and impose necessary restrictions on the expression of intent. In the interpretation of expressions of intent, the function of the principle of good faith is mainly manifested in two aspects: first, the interpretation of controversial expressions of intent. When interpreting expressions of intent based on the principle of good faith, judges need to balance the interests of both parties and fairly and reasonably determine the content of the expression of intent. The second is to fill the loopholes in the expression of intent. In this case, the judge should consider how a reasonable, honest and trustworthy person should make an expression of intent in the face of such a situation, so as to fill the loophole in the expression of intent. It should be noted that although the principle of good faith is important, it is a relatively abstract concept, and it can only be interpreted in accordance with the principle of good faith when it is not possible to interpret the expression of intent according to more specific interpretation rules such as the words and phrases, relevant provisions, purpose, nature, and customs. This is to enhance judicial credibility and to prevent abuse of judicial discretion.
(3) Other considerations in the interpretation
In the process of contract interpretation, in addition to the above-mentioned methods, other methods of interpretation, especially historical interpretation methods, can also play an important role in determining the meaning of the expression of intent. For example, when interpreting a disputed clause in the final version of a contract, the draft contract can be consulted to ascertain or infer the meaning of the clause based on the evolution of the clause's deletion or modification. Transaction documents other than the draft contract, such as negotiation minutes, memorandums, and letters of intent for transactions, can also be used as reference materials when interpreting the terms of the contract, and even the provable oral exchanges that occur during the negotiation process can also be used as a reference for the historical interpretation of the expression of intent. If the parties conclude a contract in the form of a letter or data message, the letter or data message sent to each other before the final agreement is finally reached is in nature an invitation to offer, a previous offer or a counter-offer, which is invalid because it has not been validly accepted, but is still useful for ascertaining or inferring the intent of the terms of the contract. However, since the methods of contract interpretation enumerated in paragraph 1 of Article 142 of the Civil Code are only literal interpretation, system interpretation, purpose interpretation, and interpretation in accordance with transaction customs and the principle of good faith, and there is no room for contract interpretation with the word "etc.", paragraph 1 of this article does not expand the method of contract interpretation, but adds the background of the contract, the negotiation process and the performance behavior as reference factors for contract interpretation on the basis of paragraph 1 of article 142 of the Civil Code. For example, the meaning of the disputed clause can be determined according to the negotiation background of the parties and the evolution of the relevant clauses in the negotiation process, and their understanding of the disputed clause can also be explored according to the performance of the parties. For example, Article 4.3 of the General Principles of International Commercial Contracts stipulates that the circumstances to be considered in the interpretation of a contract include the initial negotiation between the parties and the conduct of the parties after the conclusion of the contract. The inclusion of the above-mentioned factors in paragraph 1 of this article does not violate the requirements of the principle of good faith, which is conducive to further enriching the rules of contract interpretation and being consistent with international practice, but will not create the perception of breaking through legislation, and is also conducive to the people's court ascertaining the facts of the case during the trial of the case.
3. Application of Other Rules of Interpretation
(1) Mistakenly loading the rules of harmless sincerity
The rule of innocuous true intention by mistake means that even if there is an error in the expression (wording), the content of the legal act should be determined in accordance with the meaning of the counterpart if the counterpart already knows the true intention of the expressor. That is, if the parties have conclusive evidence that at the time of the conclusion of the contract, the expression (term) was given a special meaning, it should be interpreted in accordance with the special meaning. As mentioned earlier, with regard to the interpretation of contracts, the modern legal system strives to strike a balance between subjective and objective approaches. The basis for determining the content of the contract is the actual intention of the parties. Therefore, in determining the meaning of the terms of the contract, priority should be given to the common intention of the parties. When the parties to a contract have reached an agreement, but the agreement deviates from the common understanding of the representation (term), no party can reasonably rely on the objective meaning of the contract. In such a case, the common intention of the parties takes precedence over the ordinary or correct meaning of the expression (phrase). In the process of drafting this judicial interpretation, it was also suggested that the rule of objectivism could be appropriately supplemented to further reflect the idea of subjectivism as a supplement, so as to respect the true intentions of the parties. Therefore, paragraph 2 of this article stipulates that if the parties have a common understanding of the terms of the contract that is different from the ordinary meaning of the words and phrases at the time of conclusion of the contract, the meaning of the terms shall be determined in accordance with that common understanding, that is, the meaning of the terms shall be determined according to the meaning expressed unanimously by the expressor and the recipient. It should be noted that paragraph 2 of this article is paragraph 3 in the Consultation Draft, and considering that it is directly related to paragraph 1 and is a necessary supplement to paragraph 1, it is intended to state that the key to the interpretation of a contract that is different from a legal interpretation is that the interpretation of the contract stops at the point where the parties reach a consensus, so it is regarded as paragraph 2 in advance, and the original paragraph 2 is used as paragraph 3.
(2) Rules of lawful interpretation
The rule of lawful interpretation means that when there are multiple possibilities of interpretation, in principle, the one that can avoid the invalidity of the legal act should be chosen. Because, as a rule, it is in the interest of the parties to pursue a legitimate outcome by means that are legally valid. In other words, if there may be two reasonable interpretations of a contract word, one of which is not contrary to the provisions of the law and the other is the opposite, it would be appropriate to interpret the contract or its terms in a way that makes it lawful. The rule of legal interpretation is also widely recognized in comparative law, and is stipulated in the civil codes of Italy, Chile and other countries, as well as the General Principles of International Commercial Contracts and the European Principles of Contract Law. The provisions of paragraph 3 of this article are made on the basis of reference to the experience of extraterritorial legislation, and are essentially the detailed application of the purpose interpretation and system interpretation provided for in paragraph 1 of article 142 of the Civil Code. The main considerations are the following aspects: First, the parties agree on the terms of the contract in the hope that they want them to be effective, rather than not wanting them to be effective, which is also an important part of achieving the purpose of the contract between the parties. Therefore, when the ambiguity of the contract clause leads to the validity or invalidity of the contract clause, it should be considered that the interpretation that is conducive to the validity of the contract is in line with the true intention of the parties and the purpose of the contract. Second, when there is a contradiction between the terms of the contract, from the perspective of system interpretation, it is not possible to simply delete or ignore a certain clause, but to reconcile it in the direction of reflecting the true intentions of all parties as much as possible. Third, for many contracts with unclear or even no relevant provisions, if they are treated as invalid contracts, many transactions will be unreasonably extinguished. From an economic point of view, such an approach is inefficient and does not conform to the objectives and spirit of encouraging trade required by a market economy. In cases where the contract may be construed as both valid and invalid, interpreting the contract as valid in accordance with its purpose not only serves to encourage transactions and avoid loss and waste of property, but is also consistent with the parties' contractual purpose and intentions. Of course, the rule of legal interpretation is not absolute, and the following issues need to be paid attention to in its application: First, the rule of legal interpretation shall not be applied when there can only be one reasonable interpretation of the words and phrases of the contract and the interpretation is illegal, and the illegality is also harmful to public order and good customs or violates mandatory legal provisions. Second, the interests of a party urgently need to be protected, and an interpretation that invalidates the legal act should be chosen exceptionally. If the rule that renders the legal act invalid or invalid is intended to protect a party, the application of such rule cannot be easily excluded by the rule of lawful interpretation; If, on the other hand, such a rule is intended to protect public order or the public interest, it is generally necessary to choose among several possible interpretations that do not contravene such rule, in accordance with the rule of lawful interpretation. Third, under the circumstance that the meaning of the contract can be determined through literal interpretation, systematic interpretation and purposive interpretation, another meaning different from the meaning of the contract cannot be constructed for the contract according to the rules of legal interpretation. Although the latter is in accordance with the law, it is not the original meaning of the contract and should not be imposed on the contract, otherwise it will lead to the mandatory (prohibitive) provisions being hollowed out.
In the process of drafting this judicial interpretation, paragraph 3 of this article was originally expressed as "making an interpretation that is conducive to the effectiveness of the provision", but in the course of the investigation, scholars' suggestions were adopted and revised to "choose an interpretation that is conducive to the validity of the provision". The reason is that, from the beginning of the Contract Law, a distinction is made between the formation, validity and effectiveness of a contract. For example, a contract that is subject to a statutory approval process is not actually in force until it is approved. Therefore, when there are more than two interpretations of a contract clause, the court should interpret it in favor of the "validity" of the clause rather than the "validity", otherwise it will challenge the statutory approval procedure. From the perspective of encouraging transactions, it is also more reasonable to say "effective". In addition, paragraph 3 of this article has adopted the relevant suggestions and made a proviso: "Except where the provision shall be found to be invalid in accordance with laws and administrative regulations." "The reasons are: on the one hand, when there are more than two interpretations of the terms of the contract, the interpretation cannot violate the provisions of laws and administrative regulations; On the other hand, it is conceptually positive to make an interpretation that is conducive to the validity of the provision, but if the laws and administrative regulations stipulate that a certain situation is invalid, it may be risky to interpret it in the direction of validity. However, the validity of the contract clause is determined on the basis of a proper interpretation of the contract clause. If there are multiple interpretations of the contract clause after interpretation, "the interpretation that is conducive to the validity of the clause shall be chosen", which logically excludes the possibility of "determining the invalidity of the clause in accordance with the provisions of laws and administrative regulations". Moreover, since there is a possibility of effective interpretation of the clauses, it is necessary to respect the autonomy of the parties' intentions as much as possible, recognize the validity of the contract clauses, and avoid excessive interference by judicial adjudication in the freedom to conclude the contract. Therefore, the restrictive provision was deleted after study and adoption of relevant opinions.
(3) Rules in favor of the debtor
The rules of interpretation in favor of the debtor are based on the rule of interpretation in Roman law that is "unfavorable to the offeror", and are currently stipulated in the civil codes of many countries. For example, article 1190 of the French Civil Code, as amended in 2016, provides: "In case of doubt, a contract freely negotiated shall be interpreted in favour of the debtor and against the creditor." "The so-called interpretation in favor of the debtor, from the perspective of the relationship of the debt, refers to the interpretation that makes the debt burden lighter. In the process of drafting and researching this judicial interpretation, the majority of the academic and practical circles held that it is sufficient to clarify the interpretation of the gratuitous contract in favor of the debtor, because in the case of a paid contract, the principle of fairness should be followed to reasonably determine the rights and obligations of the parties. Professor Wang Liming also believes that gratuitous contracts should be interpreted in the sense that the obligations to the debtor are lighter, and in the case of paid contracts, they should be interpreted in the sense that they are more fair to both parties. Similar provisions are made in some extraterritorial legislation. For example, article 129 of the Spanish Civil Code provides: "If the contract cannot be interpreted in accordance with the above principles...... In the case of remunerative contracts, the interpretation should be made that maximizes the interests of both parties. This rule of interpretation is justified. First of all, a lighter interpretation of the debt burden means that the interpretation will make the interests of the parties less varied, so as to reduce the damage to the debtor that may result from the contract determined by interpretation, and it is also justified for the creditor. This is because as the holder of the creditor's rights and the owner of the interests, the creditor should have done its best to improve the terms of the contract involving its own rights and reduce the obstacles to the realization of its rights in the future. In the event of a dispute over the burden of debt, the creditor is effectively imputable. Second, debtor-friendly rules play a positive role in promoting efficient contracting parties. How the court interprets the contract is not only the focus of attention of the parties to the case, but also has an important guide for the behavior of the future contractor. The guiding message of the debtor-friendly rule to creditors in the contracting process is that if the creditor wishes to have its contractual rights realized in the future, it should strive to make the terms of the contract complete and clear. Based on the goal of contract law to encourage transactions, it is of great positive significance to provide positive behavioral incentives for efficient contracting. Finally, the debtor-friendly rule meets the requirements of the principle of equity. The debt burden is closely related to the interests of the parties, and the severity of the debt burden actually determines the amount of changes in interests. As mentioned above, a request for a lighter interpretation of the burden of debt is a requirement for an explanation that leaves less variation in the interests of the parties, which is clearly in line with the requirements of the principle of equity. In particular, gratuitous contracts are generally based on friendship, and there is no exchange of payment between the parties, and one party only pays but does not receive consideration, which is a unilateral contract, and only one party has a debt burden. Therefore, the focus of contract law on gratuitous contracts is usually to ease the binding force of the contract and reduce the debtor's liability, such as giving the donor the right of arbitrary revocation (Article 658, Paragraph 1 of the Civil Code) and making the gratuitous custodian only bear a lower degree of duty of care (Article 897 of the Civil Code). Accordingly, when there is a dispute over the debt burden of a gratuitous contract, the debt burden should be interpreted lightly, which is a general theory in theory and a general practice in comparative law. To that end, paragraph 3 of this article expressly limits the rule of interpretation in favour of the debtor to the area of gratuitous contracts. It should be noted that the view was expressed that the application of rules in favour of the debtor was premised on the application of other rules that would not resolve the doubt. That is, the rule can only be applied when other rules of interpretation have been exhausted but the debt burden is still disputed. In comparative law, the rule in favour of the debtor is also often seen as the final rule of contract interpretation. For example, section 2057 of the Louisiana Civil Code in the United States provides: "Where the doubt cannot be resolved by other means, the contract must be construed against the creditor and in favor of the debtor of a special debt." ”
[Practical issues]
1. The premise and sequence of the interpretation of the expression of intent
The so-called interpretation of the expression of intent refers to the interpretation of the expression of intent by the people's court or arbitration institution when a dispute arises due to the unclear or unclear expression of intent. Therefore, the premise of the interpretation of the expression of meaning is that the words and phrases used in the expression of meaning are unclear and ambiguous. If the meaning is clear and unambiguous, no explanation is required. In the case of an expression of intent by a counterpart, if the expression of intent needs to be explained, then the first thing to do is to interpret it according to the words and phrases used. If the intention is already clear in this way, there is no need to proceed further. If the expression of intent is not clear by this method, it is to be interpreted in the light of the relevant provisions, the nature and purpose of the act, customs and the principle of good faith.
2. Special Provisions on Contract Interpretation
In trial practice, attention should also be paid to the special provisions on contract interpretation. Paragraph 1 of Article 498 of the Civil Code stipulates that: "In the event of a dispute over the interpretation of standard clauses, they shall be interpreted in accordance with the common understanding." Where there are two or more interpretations of the standard clauses, an interpretation unfavorable to the party providing the standard clauses shall be made. Where standard terms and non-standard terms are inconsistent, non-standard terms shall be used. "If the object of interpretation is a standard clause, it shall be interpreted in accordance with the special provisions on the interpretation of standard clauses.