General terms and conditions (Interpretation (Maxims of interpretation and…
General terms and conditions
When interpreting the contract weight is to be given to the expression of intention in the contract as is evident to the other party. Words that are actually used determine the meaning of the contract.
Common meaning of the parties involved / Reasonable person
CC §1188: " The contract is interpreted according to the common intention of the parties rather than in the literal sense of its terms. Where this intention cannot be established the contract shall be interpreted according to the meaning which a reasonable person would attribute to it in the same situation."
Investors compensation scheme Ltd v West Bromwich Building Society, Lord Hoffmann: "The ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation which they were at the time of the contract."
BgB §157: "Contracts are to be interpreted in accordance with good faith, taking common practice into consideration."
Finding the real intention of the parties, as words are only means to express this intention they should not be interpreted literally and thus the real intention of parties should prevail.
Germany BgB §133: "When interpreting a declaration of intention the actual intention is to be ascertained rather than adhering to the literal meaning of the expression"
Factors relevant to interpretation
Common understanding of a word that is used to talk about something else than the objective meaning of the word.
Expertise of the parties
"Falsa demonstration" Both parties have used wrong terminology when concluding the contract this however doesn't invalidate the contract as it does no harm.
Maxims of interpretation and Contra proferentem
CC §1189: " All the clauses of a contract are interpreted in relation to each other, giving each one the meaning which respects the coherence of the entire contract. Where according to the common intention of the parties, several contracts contribute to the same operation, they are interpreted accordingly."
Principle of good faith