The tension between giving priority to the party’s (subjective) intention and to its (objec- tive) declaration is clearly visible in the great codifications of private law. Art. 1156 of the French Civil Code requires the court to find the “common intention of the parties”, but it also considers that unclear terms should be interpreted according to the meaning of the contract and usage (Arts. 1158–1160). }133 BGB states as the aim of interpretation “to discern the real intention”, but continues in }157 BGB with the rule that interpretation should take place “in accordance with fairness and reasonableness as understood in good commercial practice”.Reasonable Person All Euro‘pean jurisdictions adopt a compromise between attaching importance to intention and declaration. As a general principle, interpre- tation is aimed at ascertaining the meaning that the text would convey to a reasonable person having all the knowledge that would reasonably have been available to the parties in the situation in which they were at the time of the contract. The contract is thus interpreted in the way in which a reasonable person would understand it.Civil law and common law reach this result from two different perspectives. In civil law countries, the subjective intention of the parties is the starting point: in case of a dispute the meaning that a reasonable man in the position of the party would give to this intention is decisive. In English law, it is rather the objective meaning of the words of the contract that is given preference, although this is also mitigated by what is reasonable. This is reflected in Art. 5:101 PECL:“(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.(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.(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.”
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