ARTICLE 1377

Article 1377 deals with interpreting unclear

words in contracts. It's commonly used for
"contracts of adhesion," where one party
creates the contract terms, and the other can
only agree or disagree without changing the
terms. This is often seen in standard forms like
insurance policies, plane tickets, and
agreements between lawyers and clients. The
rule applies when one side has mostly written
the contract terms, and the other side just
accepts or rejects them without negotiating.

Article 1377 says that when there are unclear

words or terms in a contract, the interpretation
should not benefit the party who made it
unclear. In simpler terms, if the contract is
hard to understand because of one party's
actions, the interpretation should not be in
their favor. This rule aims for fairness when
dealing with unclear parts of a contract.

Under Article 1378, if doubts remain even after

applying the rules from Article 1370 to Article
1377 to a contract, there are additional rules
provided in Article 1378 to settle those doubts.
Essentially, Article 1378 serves as a backup or
supplementary set of rules to address
uncertainties that couldn't be resolved by the
earlier articles.
(1) In cases of doubt in a gratuitous contract:

The principle is to choose the interpretation

resulting in the least transfer of rights and
interests.
EXAMPLE:
R gave his car to E. It is not clear whether the
contract is a donation or a commodatum.
The contract should be presumed as a mere
commodatum because it would transmit lesser
rights than a donation since R retains
ownership of the car.
R gave his car to E. The type of contract is
unclear — it could be a gift (donation) or a
loan (commodatum). However, under Article
1378, it should be presumed as a loan
(commodatum). This is because it involves
fewer rights transferred than a gift, as R still
owns the car.

Tagalog:

Si R ay nagbigay ng kanyang sasakyan kay E.

Hindi malinaw kung ito ay isang regalo
(donasyon) o pautang (commodatum). Ngunit,
sa ilalim ng Article 1378, dapat itong ituring na
pautang (commodatum). Ito ay dahil mas
kaunti ang mga karapatan na naililipat kaysa
sa isang regalo, dahil nananatili pa rin kay R
ang pag-aari ng sasakyan.

(2) In cases of doubt in an onerous contract:

The doubt is resolved in favor of the

interpretation that promotes the highest level
of fairness and balance in the exchange of
benefits between the parties.

EXAMPLE:
D borrowed 10,000 pesos from C at a 12%
interest rate. The contract doesn't specify
whether D should repay the loan in six months
or one year. To make things fair, it's assumed
that the agreed period is one year. This way, D
has the benefit of using the money for a whole
year, while C earns interest for one year and
six months. This assumption aims to create a
balanced and fair arrangement for both D and
C in the loan agreement.
(parehong nagbenefits yung both parties pero
may greatest reciprocity of interest yung
nagpautang)

(3) Doubts on Principal Object of the Contract:

If there are big doubts about the main purpose

of a contract and what the parties intended,
the contract becomes null and void. This
happens when it's so unclear that you can't
figure out what the parties really meant. This
emphasizes how important it is to have clear
and understandable terms in a contract. If it's
not clear, the entire contract is considered
invalid.

EXAMPLE :
A sold to B his land. A has many land. It
cannot be determined which land was
intended by the parties to be the subject of the
sale. Therefore, the contract shall be null and
void and it is as if the parties have not entered
into any contract at all.

Article 1378 helps when there are

uncertainties in contracts. It says that doubts
in contracts should be solved fairly and evenly.
It gives instructions on what to do depending
on whether the contract is a favor (gratuitous)
or an exchange (onerous). If the doubts are so
big that we can't understand what the main
thing in the contract was supposed to be, the
contract is canceled or made invalid. This is to
make sure contracts are clear and everyone's
treated fairly.

Article 1379 says that when interpreting

contracts, we should follow the principles of
interpretation mentioned in Rule 123 of the
Rules of Court. This means we use the same
guidelines or rules that are used in the court to
understand and explain what is written in
contracts. It's a way to make sure everyone
understands and interprets contracts in a
similar and fair manner.

Rule 123 in the Philippines outlines the

procedures to be followed in Municipal Trial
Courts. It states that the procedures in these
courts should be the same as those in
Regional Trial Courts, unless a specific rule
applies only to one of these courts.
Additionally, it mentions that for criminal
cases, the procedures of the Revised Rule on
Summary Procedure should be followed. In
simpler terms, it's a set of guidelines for how
things are done in Municipal Trial Courts,
aligning them with the procedures in higher-
level courts in most cases, with some specific
rules applying only to certain courts and
certain types of cases.

Sa Rule 123 sa Pilipinas, itinatakda ang mga

hakbang na dapat sundin sa Municipal Trial
Courts. Sinasabi nito na ang mga hakbang sa
mga korte na ito ay dapat katulad ng sa
Regional Trial Courts, maliban na lamang
kung may partikular na patakaran na umiiral
lamang sa isa sa mga korte. Bukod dito,
binabanggit din na para sa mga kriminal na
kaso, dapat sundan ang mga hakbang ng
Revised Rule on Summary Procedure. Sa mas
simple na paliwanag, ito ay isang set ng mga
gabay para sa mga gawain sa Municipal Trial
Courts, na inaayon ang mga ito sa mga
hakbang sa mas mataas na antas ng korte sa
karamihan ng mga kaso, may ilang partikular
na patakaran na umiiral lamang sa tiyak na
mga korte at uri ng mga kaso.

Principles of interpretation in the rules of court

applicable :
The principles for understanding documents in
legal proceedings are now found in Rule 130,
Sections 8 to 17 of the Rules of Court. These
rules guide how documents are interpreted in
court. For instance, if there's doubt about the
meaning of a contract, the court will follow
these rules to figure out what the parties
intended.
Example
Let's say A and B sign a contract, but there's a
disagreement about the terms. The court
would refer to Rule 130, Sections 8 to 17 to
interpret the contract and determine the true
intention of A and B based on the rules
provided in those sections.
Article 1379 states that the principles of
interpretation found in Rule 123 of the Rules of
Court should also be followed when
interpreting contracts. These principles guide
how legal documents are understood. The
significance lies in creating consistency and
fairness in interpreting contracts, aligning the
rules used in court proceedings with those
applied to contracts. Additionally, the
reference to Rule 130, Sections 8 to 17,
emphasizes the importance of specific rules
for interpreting documents, ensuring a
standardized and just approach in legal
contexts. This helps in maintaining clarity and
fairness when dealing with contracts in legal
proceedings.