The Role of Will in Contract Interpretation in Law and Judicial Practice

Abstract

The purpose of concluding any contract is the execution of its provisions and adherence to the effects arising from it. For the contract to proceed smoothly without obstacles in its implementation, the parties must not have disputes or conflicts regarding the conditions of validity, contractual terms, and manner of performance. Interpretation of contracts becomes necessary when a disruption arises in the execution of the contractual provisions or in the effectiveness of the individual and social relationship between the parties. Contract interpretation aims to resolve ambiguities and contradictions within the contract in order to reach the intent of the contracting parties, and the means of ascertaining such intent is derived from the text of the contract as well as the conduct of the parties. The will of the parties is considered the most important source of contract interpretation. The research method employed in this study is an analytical–descriptive method, relying on library sources including literary, jurisprudential, and legal texts, along with judicial opinions of courts. The principal means of expressing will is the contractual document itself, through which the parties directly and explicitly declare their intention. Moreover, consistent conduct and activities indicating the consent and intention of the parties are also regarded as a form of will expression. There are various tools that assist the judge in identifying the will in contract interpretation, among which is the mutual intent of the parties. When the resolution of ambiguities and disputes proves difficult, the interpretation of the will of a reasonable and ordinary person under the same circumstances as the parties is taken into account. At times, in practice, judges are confronted with cases where the legislator has not provided a solution. In such cases, prior judicial rulings that have crystallized into judicial precedents aid the judge in resolving the issue. The purpose of contract interpretation is to remove ambiguity in order to ascertain the mutual intent of the parties, or, when necessary, to rely on the contractual text or external sources. Thus, discovering the mutual intent of the parties is the primary goal of interpretation. Custom is one of the most important and influential tools, often serving as proper guidance for contract interpretation and assisting courts in discerning the mutual intent of the parties. In the Iranian legal system, particularly in the Civil Code and the discussion of contract interpretation, custom has been emphasized, and in cases of silence or lack of explicit agreement by the parties, the law has, in most instances, recognized custom as governing. In contract interpretation, custom has its own elements and conditions. According to Article 226 of the Civil Code, the words of contracts are presumed to bear their customary meanings. That is, the words and expressions used in a contract are understood according to their conventional meaning, unless the parties explicitly or implicitly assign a different meaning to them within the contract. This article expresses the validity of verbal custom in contract interpretation. The will and intention of the parties in Iranian law and judicial practice constitute the principal source of contract interpretation. The discovery of the intent and will of the parties at the time of conclusion and execution of the contract is the goal of interpretation, and in the event of disputes between the parties, the judge may, through the use of the specific instrument of “judicial precedent,” resolve the conflict, interpret the contract, and thereby achieve justice.