Most contractual disputes arise not from denying the contract or refusing to perform it but from the parties disagreeing about what they agreed. Did the price include installation? Does maintenance extend to spare parts? Does delivery mean placing the goods at the port or at the warehouse? Here the judge intervenes, not to write the parties a new contract but to reveal their true intention at the time of contracting and supply what they omitted. Kuwait Civil Code No. 67 of 1980 lays down disciplined rules for this exercise, limiting arbitrariness and guiding the court. This article explains those rules and their practical effect on drafting.
The First Rule: Clear Wording Is Not Construed
This is the cornerstone of interpretation, requiring respect for what the parties expressly agreed:
- The rule: where the contract's wording is clear and unambiguous, it may not be departed from on the pretext of searching for the parties' intention, since clarity indicates that the wording expressed the intention correctly.
- Its rationale: preserving the stability of dealings and preventing the judge from rewriting the contract according to their own view of fairness. Contractual justice is achieved first by respecting what the parties agreed.
- Its limit: where the circumstances show that clear wording does not express the true intention, the judge may go beyond it but must set out in the judgment the indications that led to this.
- Appellate control: breach of this rule is subject to review by the Court of Cassation, since departing from clear wording is an error in applying the law rather than a mere evaluative judgment.
The Second Rule: Ascertaining Common Intention
Where the text is ambiguous or admits more than one meaning, the judge moves to ascertaining intention:
- Common rather than unilateral intention: what matters is what both parties intended, not what one of them privately intended without communicating it.
- Means of ascertainment: the circumstances of negotiation, exchanged correspondence, earlier offers, and the parties' conduct during performance. Actual performance is the clearest evidence of shared understanding.
- Nature of the dealing: regard is had to the nature of the activity and to the parties' prior course of dealing in similar contracts.
- Honesty and confidence: the meaning consistent with the honesty and confidence that should exist between contracting parties is preferred over one that opens the door to evasion.
- Reading the contract as a whole: a clause is construed in light of the entire contract rather than in isolation, the contract being an indivisible whole.
Resolving Doubt
Where ambiguity resists resolution, the judge turns to defined fallback rules:
- The general rule: doubt is resolved in favour of the debtor, since freedom from obligation is presumed and no one is burdened with an obligation absent clear evidence.
- The exception in adhesion contracts: doubt is resolved in favour of the adhering party even where they are the creditor, because they took no part in drafting.
- Construction against the drafter: ambiguous wording is construed against the party who drafted it, who could have made it clear and must bear the consequence of not doing so.
- Narrow construction of waivers: exclusions of liability and waivers of rights are construed narrowly, and a waiver is not presumed absent express words.
Filling Gaps
The judge's role extends beyond interpreting what is present to completing what is missing, since a contract is not confined to its express terms:
- Implied requirements: a contract includes what its nature requires according to law, custom, and fairness, even where not expressly stated.
- The role of custom: commercial or professional custom prevailing in the activity completes the contract, as where installation is treated as included in the price of equipment customarily installed, or where usual delivery periods in a particular trade are implied.
- Good faith in performance: each party must perform consistently with good faith, which includes a duty to cooperate, not to obstruct the other's performance, and to disclose matters of concern to them.
- Ancillary obligations: the judge may derive obligations the contract did not mention but which are necessary to achieve its purpose, such as a seller's duty to supply a user manual or a provider's duty to safeguard client data.
- The limit of the power: under the guise of filling gaps the judge may not create a new obligation the parties never intended or alter the economic balance of the contract.
Appellate Control Over Interpretation
A fine line separates what the Court of Cassation reviews from what is left to the trial judge:
- Left to the trial judge: deriving common intention from the circumstances and documents, an evaluative assessment not subject to review where reasonable and grounded in the material on the file.
- Subject to review: distorting clear wording, mangling a document by giving it a meaning contradicting its express terms, or legally mischaracterising the contract.
- Characterisation, not interpretation: characterising a contract as sale, works, or agency is a question of law subject to review, since characterisation determines which provisions apply.
- Reasoning: the judgment must set out the grounds on which its interpretation rests, and inadequate reasoning on this point exposes it to being set aside.
The Effect on Drafting
These rules bear directly on what should be done when drafting:
- Define terms: include a definitions clause fixing the meaning of key words such as delivery, completion, defect, and force majeure, closing the door to construction.
- Define the scope precisely: state expressly what the obligation includes and what it does not. Silence is filled by custom, which may not match your expectation.
- Document the negotiation: retain correspondence and offers, the most important tools for revealing intention in a dispute.
- Watch your conduct during performance: repeated indulgence in applying a clause may be construed as an implied variation of it.
- Entire agreement clause: stating that the contract represents the whole agreement and supersedes what preceded it reduces disputes over earlier promises, though it does not displace good faith.
- Governing language: where a contract is executed in two languages, specify which prevails in the event of divergence. This is a recurring source of dispute in international contracts.
The best contract is one that needs no interpretation, and precision in drafting today costs far less than years of litigation tomorrow. Yamnak Law Firm drafts and reviews contracts in precise language that closes the avenues of construction, and argues contract interpretation and characterisation disputes before courts at every level.
