Subject of Contract Interpretation.

the nature of the contract, or more specifically, does not change the will of the parties entering into the contract.

The above concept contains the most essential points about contract interpretation, which are:

- This is an activity to accurately determine the contents of the contract, such as the rights and obligations of the parties in the contractual relationship, the subject, the implementation period..., through: firstly clarifying the meaning of the expression in one or more contents of the contract; secondly, supplementing the shortcomings in one or more provisions of the contract.

- The subjects of contract interpretation activities are judges or other subjects depending on different jurisdictions (for example, arbitrators ...).

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- The typical object of contract interpretation is to determine the common intention of the parties to the contract.

- The nature of this activity is to clarify or supplement missing content of the contract, so the judge does not have the right to change the content of the contract.

Another problem is that, in general, the concepts of contract interpretation are relatively unified, because they mainly focus on the function and object of that activity. However, the regulations on specific principles of contract interpretation activities are mainly developed based on different theoretical foundations of contracts, so the way of expressing the content of the principles and the order of priority are also different.

1.1.2. Subject of Contract Interpretation activity.

Regarding the provisions of Vietnamese law, the determination of the subject of contract interpretation is unclear, the authors of the Institute of Legal Science only give instructions.

in general: “ The law does not specifically stipulate who is responsible for interpreting the content of a civil transaction. Normally, in case of misunderstanding of the content of a civil transaction, first of all, there must be a discussion and agreement between the parties. If the parties cannot reach an agreement, they can request the competent authority or the Court to decide ” [31, p.305], so this approach to the subject of contract interpretation is quite similar to the expression of Russian jurists, according to Berezina, “ it is a special form of legal interpretation, carried out by traditional methods of legal techniques and methods originating from the specific contract content of the specific legal activities of the parties to the contract, their representatives, the court and other legal entities, in the direction of clarifying the meaning of the terms of each separate contract for the purpose of its implementation ” [24, p.44], with such a definition, according to Berezina the subject of contract interpretation activities first belongs to the parties to the contract, then the representative, the court and other legal entities. With the same approach, some Vietnamese jurists also have the opinion that the issues arising from the request for contract interpretation are also a type of contract dispute, so the subject with the authority to resolve the dispute can also interpret the contract [41, p.32]. However, the above understanding still has a difficult point to understand, that is, if the contract interpretation activity is evaluated by stage, which is the determination of will, then if the negotiation and mediation stage between the parties, or according to the way of determining the subject of contract interpretation is the parties to the contract, then can it still be considered a contract interpretation activity when the agreement between the parties in many cases has changed the original will to be expressed, especially in cases where it cannot be determined?

The boundary between keeping the content of the contract intact and not changing the will of the parties, only to clarify the meaning or fill in the loopholes of the contract.

Meanwhile, according to the regulations and understanding of traditional jurists, many opinions believe that the subject of contract interpretation activities is judges. Konrad Zeugert and Hein Koetz believe that Contract Interpretation is the process of performing the judge's duties. Dr. Nguyen Ngoc Khanh believes that: "In reality, the content or terms of the contract are not always fully and clearly expressed. In that case, the Court will have the task of clarifying the meaning and content of the contract that the parties have signed. The form of Court activity in such cases is called contract interpretation" [28.p126]. According to Professor Vu Van Mau, " a contract is binding on the contracting parties. Judges do not have the right to change the content of the contract, but judges have the right to interpret the contract to know its content because many times the contracting parties do not agree on this issue and must ask the judge to resolve the dispute" [38, p.260]. Thus, the subject of contract interpretation can only be the judge and not the parties to the contract.

There are also certain limitations to this view, that is, if according to the regulations, the Judge is the only entity with the authority to interpret the contract, the activity is at a great disadvantage if considered according to the stages of contract conclusion, accordingly, this activity only has much meaning after a dispute arises from the contract or there is a request from the contracting parties after implementation and discovery of shortcomings or unreasonable points from one or more terms of the contract, while the request for contract interpretation arises from the nature of the contract that has occurred right from the time of conclusion, the contract itself has appeared loopholes or contains

The terms are ambiguous and unclear, so right from the request stage, if encountering a case like the above, the court with jurisdiction from which stage needs to be carefully considered.

Thus, from the above observations, the current somewhat reasonable way to approach the issue of the subject of contract interpretation is to view it from the perspective that cases where contracts need to be interpreted also have some characteristics similar to contract disputes (although contracts needing interpretation cannot be identified as a type of contract dispute because contracts needing interpretation do not arise from a breach but originate from the content of that contract), accordingly the subject of resolving contract disputes is also the subject of contract interpretation activities. The reason for this assessment is that (1) it comes from the interpretation of the contract with ambiguous or flawed terms leading to incorrect understanding and application in practice, resulting in disagreements between the parties involved in the contract (although these disagreements do not stem from violations by the parties like normal disputes) and thus arise a request for contract interpretation from an independent entity with sufficient capacity (in these cases it is difficult to stipulate that the two parties negotiate by themselves, because the nature of the negotiation process is no longer a contract interpretation activity, the negotiation process may have changed the original intention of one or both parties to the contract) (2) regarding the issue of contract interpretation activities, it is difficult to have a mandatory limit in determining the subject with the authority to interpret each individual contract, (3) normally the subject of dispute resolution can be a judge (according to court proceedings), an arbitrator (resolved according to commercial arbitration procedures). For such subjects, the requirements for the subject of contract dispute resolution have also been

guarantee (in terms of expertise, qualifications, level of understanding in the field of settlement ...), thus also fully meeting the ability to interpret the contract.

Thus, it can be understood that the subject with the authority to resolve the issue of contract interpretation today is a judge or arbitrator according to judicial proceedings or resolved by commercial arbitration, depending on the content of each contract and the regulations of each jurisdiction.

1.1.3. Functions of Contract Interpretation

As we have observed through the survey of the concepts of contract interpretation, the functions of this activity can be summarized as follows: first, clarifying the meaning of the contract; second, supplementing the missing contents of the contract, which comes from the subject of this problem, which is (1) the provisions of the contract are unclear, or (2) the contract has incomplete provisions. In practice, in different jurisdictions, there are ways to separate the subjects that need to be resolved by contract interpretation activities in specific details, most of which can be divided into cases where contract interpretation activities need to be applied, and from there, the main function of this activity is clearly shown, which is:

Firstly , the contract has ambiguous and difficult-to-understand content. Here it must be clearly stated that a contract in any jurisdiction is required to express certain contents in order to express the will of the parties and therefore is also used to meet the requirements for dispute resolution activities, and we understand that the content of the contract is known as the conditions of the contract. Thus, normally in contracts there are provisions stipulating general principles between the parties, in which there must be basic provisions and there may be common provisions, optional provisions (the common provisions here are understood in relation to the Basic Provisions).

The basic terms are mandatory terms, if missing, the contract is not considered to have been concluded. The normal terms are the terms agreed by the parties but these terms are not mandatory. And when a dispute arises that the parties do not agree, the provisions of the law will be applied to resolve it). If according to the above interpretation, the content is ambiguous and unclear, it is necessary to interpret the contract, meaning that the terms of the contract are unclear, leading to the failure to express the will of the parties entering into the contract or the failure to express the basis for resolving disputes arising from that contract. The solution for this case is different depending on the development doctrine of each jurisdiction and is often concretized into principles for application in practice (these principles will be analyzed specifically in Chapter 2 of the thesis). Another consequence of referring to the subject of contract interpretation activities on the ambiguous content of the contract is that the terms of the contract can be understood in many ways. In fact, these terms may express general principles that the parties must comply with or terms that establish the rights and meanings of the subjects. A term with many interpretations may lead to the consequence of fundamentally distorting the content of the entire contract, thus, in a fundamental sense, distorting the will of the parties. However, in the case of terms that are interpreted in many ways, the contract interpretation activity needs to be especially careful, because if the principles based on declared will are abused, it may distort the nature of the contract interpretation activity, which is the requirement to ensure that the content of the contract is not changed.

Second , the contract has loopholes that need to be filled. This is a rather special subject of contract interpretation activities, a basic contract ensures content, expresses the will of the parties, and therefore can be used as a basis for interpretation.

resolving disputes. In practice, contracts can hardly fully express their contents or conditions as ideally as in theory. However, the basic contents to express the will of the parties are also required by all jurisdictions. Therefore, the lack of provisions in the content of the contract is the subject of the above contract interpretation activities. For this type of subject, the major problem that is usually raised is (1) when the parties use contract interpretation measures to fill the "gaps" of the contract; the problem is (2) which contract interpretation measures to use and how to use these measures.

Regarding the application of the principle of supplementing missing terms in contract interpretation, two issues need to be noted. First, when to apply this principle; second, the standards and methods for supplementing missing terms in the process of contract interpretation.

Regarding the first issue, that is when the parties use contract interpretation measures to fill in the “gaps” of the contract. As we have distinguished above between basic terms and common terms, the classification of terms as above has a great impact on the validity of the contract because the lack of basic terms is considered as not having concluded the contract, but for common terms, the issue of contract interpretation may have to be raised. In practice, the presence of "gaps" in the provisions of the contract content can be the result of errors in the contract drafting step for many reasons, possibly due to carelessness or unexpected circumstances when the parties perform the contract. One case that can be considered for additional application is the case of determining that the contract is specifically identified and has the full nature of a type of contract prescribed by law. However, in practice, the drafter may have limited legal knowledge of this content or be negligent in not specifying it in the contract.

Contracts that lead to deficiencies. For example, property lease contracts, contracts that do not stipulate provisions on measures to ensure the use value of leased property, or house lease contracts that do not have provisions on the tenant's public living obligations...

Compared with some views on the requirement for the use of contract interpretation to fill in the gaps of the contract, according to UNIDROIT's interpretation, the requirement for this function is as follows: " The missing terms or gaps in the contract that arise after the conclusion of the contract, if not adjusted by the parties to the entire contract, may be because they do not want to resolve, or because they could not have expected these cases " [6, p.70], it can be seen that the unclear issue raised by UNIDROIT's interpretation here is whether such a basis ensures the essential element of the contract or not, the interpretation phrase "because they do not want to resolve", then it can be understood that the participants in the contract have clearly identified the problem, know the content that they do not want to resolve, so does contract interpretation change the nature of the original parties' will and the nature of the contract with respect to the content of "not wanting to resolve the problem" or not? and therefore, as a general rule, judges in this case will not apply contract interpretation to resolve the issue.

Regarding the second issue , the standards and methods for supplementing terms. This is a practical issue that is very difficult for lawmakers and the subjects of interpretation when interpreting contracts. How to supplement to ensure that the nature of the contract is not changed and also meet the requirements of full content, UNIDROIT has provided general guidance, we can understand each specific case to apply to find the internal and external factors of the contract.

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