Article 1370 states that if contract terms are clear, their literal meaning controls. However, if words contradict the parties' evident intention, the latter prevails. This is illustrated with examples like a 'contract of lease' document that clearly states transfer of ownership, which should be interpreted as a contract of sale based on the evident intention to transfer ownership.
Article 1371 emphasizes considering the parties' contemporaneous and subsequent acts to judge their intention. Since intention is a state of mind, actions like fencing a property, cultivating land, and paying taxes on it, with the knowledge of the other party, can reveal the true intent of a contract, such as a contract of sale.
Article 1372 specifies that general terms in a contract should not include things or cases distinct from what the parties intended to agree upon. For example, a contract stating 'including all furniture' would not cover items not owned by the seller or items that are appliances, not furniture, as these are distinct from the general term 'furniture'.
Article 1373 dictates that if a contract stipulation has multiple meanings, the interpretation that renders it most effectual and valid should be chosen. For instance, if a contract of sale for a house could refer to one fully owned by the seller or one co-owned, it should be interpreted as referring to the exclusively owned property to validate the contract.
Article 1374 states that all stipulations in a contract must be interpreted together, deriving meaning from the entire instrument. The contract should be read as a whole, and particular words or phrases should be understood in relation to other provisions.
Article 1375 guides that words with multiple significations should be understood in the context that best aligns with the nature and object of the contract.
Article 1376 allows for the usage or customs of the place to be considered when interpreting ambiguities or filling omissions in a contract. For example, if services are rendered without an agreed amount, the customary rate in that place should apply.
Article 1377 establishes that obscure words or stipulations should not favor the party who caused the obscurity. This principle, known as 'contra proferentem', means that ambiguities are construed against the drafter. This is commonly applied in 'contracts of adhesion' like insurance policies, which are drafted by one party.
Article 1378 provides rules for settling impossible doubts. For incidental circumstances in a gratuitous contract, the interpretation leading to the least transmission of rights and interests prevails. For onerous contracts, the greatest reciprocity of interest should prevail. If doubts are cast upon the principal object of the contract, rendering the intention unknown, the contract shall be declared null and void, as it lacks a definite object, which is an essential element.
Article 1379 states that the principles of interpretation found in Rule 123 of the Rules of Court shall also be observed in contract construction. This includes giving effect to all provisions and prioritizing written words over printed forms when inconsistent.