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Interpretation in the Draft Common Frame of Reference Kåre Lilleholt, University of Oslo FACULTY OF LAW, UNIVERSITY OF OSLO Interpretation of contracts • DCFR Book II Chapter 8 – contracts – other juridical acts • Also Chapter 9 on “contents and effects” FACULTY OF LAW, UNIVERSITY OF OSLO Comparisons • Italian law • English law FACULTY OF LAW, UNIVERSITY OF OSLO Intention and interpretation • Contract: intention to create legal effects • Intention must be expressed FACULTY OF LAW, UNIVERSITY OF OSLO II. – 4:101: Requirements for the conclusion of a contract • A contract is concluded, without any further requirement, if the parties: • (a) intend to enter into a binding legal relationship or bring about some other legal effect; and • (b) reach a sufficient agreement. FACULTY OF LAW, UNIVERSITY OF OSLO II. – 4:102: How intention is determined • The intention of a party to enter into a binding legal relationship or bring about some other legal effect is to be determined from the party’s statements or conduct as they were reasonably understood by the other party. FACULTY OF LAW, UNIVERSITY OF OSLO Agreement and terms • Determination of intention to create legal effect • Determination of contents of the contract FACULTY OF LAW, UNIVERSITY OF OSLO Basic approaches • Subjective approach • Objective approach FACULTY OF LAW, UNIVERSITY OF OSLO Lynx FACULTY OF LAW, UNIVERSITY OF OSLO Subjective approach • Common intention of parties • One party’s intention is known to the other party (or the other party ”could reasonably be expected to be aware” of it) FACULTY OF LAW, UNIVERSITY OF OSLO Common intention • DCFR II.–8:101(1) • CC art. 1362(1) • English law (but question of evidence) FACULTY OF LAW, UNIVERSITY OF OSLO One party’s intention known to the other party • DCFR II.–8:101(2) • Italian law – good faith? • Relationship with rules on mistake (and validity) • Hartog v. Colin and Shields [1939] 3 All ER 566 FACULTY OF LAW, UNIVERSITY OF OSLO Objective approach • No common intention (or one party’s intention known to the other) • Third party has relied on the contract • ”… the meaning that a reasonable man would give to it” FACULTY OF LAW, UNIVERSITY OF OSLO Comparison • Codice Civile art. 1366 • English law: ”ordinary meaning” as main rule FACULTY OF LAW, UNIVERSITY OF OSLO Matters relevant to interpretation • DCFR II.–8:102 • Circumstances, negotiations included • Conduct of the parties, subsequent conduct included • Interpretations and practices established by the parties FACULTY OF LAW, UNIVERSITY OF OSLO Relevant matters (ctd.) • Common interpretation in branch of activity, previous interpretation • Nature and purpose of the contract • Usages • Good faith and fair dealing FACULTY OF LAW, UNIVERSITY OF OSLO Comparison • Italian law: CC arts. 1362(2), 1366, 1368, 1369 • English law – not negotiations – not subsequent conduct FACULTY OF LAW, UNIVERSITY OF OSLO Interpretation guidelines • Character of such guidelines (”interpretation rules”) • Contra proferentem in particular FACULTY OF LAW, UNIVERSITY OF OSLO Contra proferentem • DCFR II.–8:103 • Codice Civile art. 1370 • ”Construction against grantor” FACULTY OF LAW, UNIVERSITY OF OSLO Preference for negotiated terms • DCFR II.–8:104 • Codice Civile art. 1342(1) • English law FACULTY OF LAW, UNIVERSITY OF OSLO Contract as a whole • DCFR II.–8:105 • Codice Civile art. 1363 • English law FACULTY OF LAW, UNIVERSITY OF OSLO Effective terms • DCFR II.–8:106 • Codice Civile art. 1367 • English law FACULTY OF LAW, UNIVERSITY OF OSLO Language versions • DCFR 8:107 • National law? FACULTY OF LAW, UNIVERSITY OF OSLO Implied terms • DCFR II.–9:101 • Codice Civile art. 1340 and 1374 FACULTY OF LAW, UNIVERSITY OF OSLO Common core or models rules? • How much is common? • In particular English law • Application of the principles influenced by national law FACULTY OF LAW, UNIVERSITY OF OSLO