Philippine Bar review · Question

Practice question: Interpretation of Contracts

Multiple Choice Hard

Practice question

A warehouse contract uses a term with two possible meanings. One reading is consistent with the defined storage service and gives the clause practical effect; the other defeats the clause’s operation and conflicts with the contract’s stated object. No contrary evident intention is established. Which approach follows Articles 1373–1375?
  1. Prefer the ineffective reading simply because it is shorter.
  2. Ignore all other clauses and choose randomly.
  3. Treat every word with two meanings as creating automatic nullity.
  4. Read the term consistently with the contract’s nature and object, the other stipulations, and an effectual meaning.
  5. Allow the party first filing suit to choose conclusively.

Legal references

  • https://lawphil.net/statutes/repacts/ra1949/ra_386_1949.html — Civil Code, articles 1370–1378.

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