Friday, January 6, 2017

In this regard, guidance is provided by the following articles of the Civil Code involving the interpretation of contracts:

Article 1370.  If the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control.

If the words appear to be contrary to the evident intention of the parties, the latter shall prevail over the former.

Article 1371.  In order to judge the intention of the contracting parties, their contemporaneous and subsequent acts shall be principally considered.

Rule 130, Section 13 which provides for the rules on the interpretation of documents is likewise enlightening:

Section 13.  Interpretation according to circumstances. - For the proper construction of an instrument, the circumstances under which it was made, including the situation of the subject thereof  and of the parties to it, may be shown, so that the judge may be placed in the position of those whose language he is to interpret.

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