THE LAW ON

OBLIGATIONS AND
CONTRACTS
Articles 1377-1382
By Claus, Christie Jane B.
ARTICLE 1377
The interpretation of obscure words or stipulations
in a contract shall not favor the party who cause the
obscurity.
ARTICLE 1378
When it is absolutely impossible to settle doubts by the rules established in the
preceding articles, and the doubts refer to incidental circumstances of a
gratuitous contract, the least transmission of rights and interest shall prevail. If
the contract is onerous, the doubt shall be settled in favor of the greatest
reciprocity of interest.
If the doubts are cast upon the principal object of the contract in such a way
that it cannot be known what may have been the intention or will of the parties,
the contract shall be null and void.
ARTICLE 1378
 GRATUITOUS CONTRACT- If the doubts refer to incidental circumstances of a gratuitous
contract, such as interpretation should be made which would result in the least transmission of
rights and interests.

 ONEROUS CONTRACT – If the contract in question is onerous, the doubts should be settled
in favor of the greatest reciprocity of interests.

 PRINCIPAL OBJECT OF THE CONTRACT – If the doubts refers to the principal object of
the contract and such doubt cannot be resolved thereby leaving the intention of the parties
unknown, the contract shall be null and void
ARTICLE 1379
 The principles of interpretation stated in Rule 123 of the rules of
court shall likewise be observed in the construction of contracts.

 The rules in the Rules of Court on the interpretation of documents

are now contained in Rule 130, Sections 8 to 17 thereof
RULE 130 OF RULES OF
COURT
SEC. 8. Party who calls for document not bound to offer it.
SEC. 9. Evidence of written agreements.
SEC. 10. Interpretation of a writing according to its legal meaning.
SEC. 11. Instrument construed so as to give effect to all provisions
SEC. 12. Interpretation according to intention; general and particular provisions.
SEC. 13. Interpretation according to circumstances.
SEC. 14. Peculiar signification of terms.
SEC. 15. Written words control printed.
SEC. 16. Experts and interpreters to be used in explaining certain writings.
SEC. 17. Of two constructions, which preferred.
ARTICLE 1380
Contracts validly agreed upon may be rescinded in
the cases established by law.

 Rescissible contracts are those validly agreed upon because all the essential
elements exist and, therefore, legally effective ,but in the cases established by
law, the remedy of rescission is granted in the interest of equity.
ARTICLE 1381
 The following contracts are rescissible:
 1. Those which are entered into by guardians whenever the wards
whom they represent suffer lesion by more than one-fourth of the
value of the things which are the object thereof;
 2. Those agreed upon in representation of absentees, if the latter
suffer the lesion stated in the preceding number;
 3. Those undertaken in fraud of creditors when the latter cannot in
any other manner collect the claims due them;
ARTICLE 1381
 4. Those which refer to things under litigation if they have
been entered into by the defendant without the knowledge
and approval of the litigants or of competent judicial
authority;
 5. All other contracts specially declared by law to be
subject to rescission.
ARTICLE 1382
 Payments made in a state of insolvency for obligations to
whose fulfillment the debtor could not be compelled at the
time they were effected, are also rescissible.