Article 1376.

The usage or custom of the place shall be borne in mind in the interpretation of the
ambiguities of a contract, and shall fill the omission of stipulations which are ordinarily established.

Example: A sold a horse to B. It was the custom of the place to place horse shoe on sold horses.

Who has the burden of Proof?

- The party alleging it

Usage or custom is allowed to supersede or vary the plain terms of a contract. True or False?
- False

Rule: It shall fill the omission of stipulations which are ordinarily established.

Example: In the Province of Samar, Mr. Abad rendered grooming services to Mr. Garcia. But the
contract did not provide for the amount of compensation to be paid. In this case, the amount must
be determined by the rate customarily paid for grooming services in the Province of Samar.

The law has developed different forms of usage.

1. Local usage
2. General usage

Rule: If the customs and usages are general

- they need not be pleaded
-As a result, they can be proved in court even though they haven't been previously alleged

Rule: If a custom be in character, and therefore presumed to be known by the parties, the rule is
that such custom may be proved without being specifically pleaded.
- This is particularly true when a general custom is offered in evidence to throw light upon a
contract, the terms of which are obscure, and which is dependent upon evidence of such general
custom to make it plain.

Rule: If the customs and the usages are merely local

- then they have to be both alleged, pleaded and proved

Article 1377. The interpretation of obscure words or stipulations in a contract shall not favor the
party who caused the obscurity.

Reasons: Since he caused the obscurity, the party who drew up the contract with ambiguous terms
should be responsible therefor; so the obscurity must be construed against him. Therefore, the
drafter of the terms of the contract should be careful.

Article 1377. This rule generally applies to Contracts of Adhesion

Contracts of Adhesion- Form contract drafted by one party (usually a business with stronger
bargaining power) and signed by the weaker party (usually a consumer in need of goods or
services), who must adhere to the contract and therefore does not have the power to negotiate or
modify the terms of the contract.

Are adhesive contracts Void?

- No, the Supreme court has already said that they are valid.
Art. 1377 of the Civil Code applies with even greater force in contracts of adhesion where the
contract is already prepared by a big concern, and the other party merely adheres to it, like
insurance or transportation contracts, or bills of lading.

Example: Obscure terms in an insurance policy are construed strictly against the insurer, and
liberally in favor of the insured.