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CHAPTER 5 - INTERPRETATION 286

Article 5.101 (Ex art. 7.101/ 101A) - General Rules of Interpretation 287

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. 288

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. 289

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. 290

Article 5.102 (ex art. 7.102) - Relevant Circumstances 291

In interpreting the contract, regard shall be had, in particular, to: 292

• the circumstances in which it was concluded, including the preliminary negotiations; 293
• the conduct of the parties, even subsequent to the conclusion of the contract; 294
• the nature and purpose of the contract; 295
• the interpretation which has already been given to similar clauses by the parties and the practices they have established between themselves; 296
• the meaning commonly given to terms and expressions in the branch of activity concerned and the interpretation similar clauses may already have received; 297
• usages; and 298
• good faith and fair dealing 299

Article 5.103 (ex art. 7.103) - Contra Proferentem Rule 300

Where there is doubt about the meaning of a contract term not individually negotiated, an interpretation of the term against the party who supplied it is to be preferred. 301

Article 5.104 (ex art. 7.104) - Preference to Negotiated Terms 302

Terms which have been individually negotiated take preference over those which are not. 303

Article 5.105 (ex art. 7.105) - Reference to Contract as a Whole 304

Terms are interpreted in the light of the whole contract in which they appear. 305

Article 5.106 (ex art. 7.106) - Terms to Be Given (Full) Effect 306

An interpretation which renders the terms of the contract lawful, or effective, is to be preferred to one which would not. 307

Article 5.107 (ex art. 7.107) - Linguistic Discrepancies 308

Where a contract is drawn up in two or more language versions none of which is stated to be authoritative, there is, in case of discrepancy between the versions, a preference for he interpretation according to the version in which the contract was originally drawn up. 309