Interpretation of the contract what do we mean by interpretation of the contract Hi, I'm Giuseppe La Rocca I'm a financial advisor I welcome you or Welcome back or Welcome back to our Podcast of private law in 3 minutes many episodes of private law always just more or less in 3 minutes I remind you that I launched a private law handout and I started a collaboration with an expert in private law for online tutoring if one of these two things or both interest you contact me in Direct on Instagram let's start So immediately to talk about interpretation of the contract but as always only after the acronym first of all what do we mean by interpretation of the contract when we talk about interpretation of the contract we refer to the process with which we try to identify the meaning and scope of an agreement stipulated between the parties what is written is not always immediately clear and it is often necessary to analyze the text to understand what the real intentions of the parties were Article 1366 of our beloved civil code establishes a fundamental principle the contract must be interpreted according to the principle of good faith a principle that therefore leads us to say the interpreter to consider fair and legal behavior and correct of the parties but how is a contract interpreted then the interpretation of a contract has some specific rules let's look at three of them the search for the common intention of the parties the effect of the contract and the criterion of reliance let's start with the first the search for the common intention of the parties the interpreter must not cannot stop at the simple literal sense of the words but you must go beyond and try to understand what the real intent of the parties was the objective therefore is not just simply to read but to actually understand what the parties really wanted to achieve with this contract we then have the effect of the contract again in article 1367 of our beloved civil code we find that the contract must be interpreted in the sense in which it can produce some effect rather than the sense in which it would have no effect In other words So if there are doubts The interpreter is privileged action that goes to make that contract effective in some way number three the criterion of reliance this last criterion implies that the contract is interpreted considering how a reasonable party would have understood what is the actual content of the agreement obviously based on the information and also on the context that this party has available now If despite the application of these criteria there still remains a certain level a certain degree of uncertainty about the actual interpretation of the contract what happens to us a rule intervenes once again provided by our Here it is today It is the third time that we bring it up in this much-loved video Civil Code with article 1371 if the contract is free of charge it is interpreted In the sense that is less burdensome for the obligated party But if the contract is instead onerous it is interpreted in such a way as to guarantee a fair balance of the interests of the parties trying in short to balance what are the reciprocal rights and duties The interpretation of the contract Therefore essential to resolve disputes and to effectively and correctly apply the agreements between the parties in a world where every word counts understanding the profound meaning of a trait can actually make the difference between a peaceful solution and a legal battle I hope I have been helpful to you I hope that these videos are videos full of content for you who are watching the video of value If so obviously leave a like leave a like Very important because you will help the YouTube algorithm to spam a little everywhere This video wherever there are people like you interested in videos of in this case law private law Who knows, one day, why not also commercial law If you haven't done so already, obviously subscribe to the channel and if you want to comment, why not comment, tell me what you think of these videos, if you like them, if there is something that can be improved or not, I am always open to constructive criticism. All that's left for us to do is say goodbye and say goodbye to the next video on private law in 3 minutes. Bye