Contemporary Development Trend Of Contract Interpretation

Contract is a very important legal relationship involved in modern civil and economic activities. Although contracts stipulate the rights and obligations of both parties, disputes may still occur which parties to the contract are often unable to solve. Many factors, such as the presentation of the rights and obligations, wording, legal knowledge and ability of both parties, the situation under which the contract is signed and performed, may subject the contract to disputes. Where parties to the contract are deficient in solving the disputes, it would become necessary to have recourse to a third party who can interpret the meaning of the contract, the purposes of both parties and even the binding force of the contract. As the economic transactions become increasingly complex, and the trade relationship becomes more and more diversified, there would be more uncertainties concerning with the contractual relationships. Under these situations, contractual interpretation will play a very important role in protecting the business transactions. In a world where there is the new trend of globalization of economic and legal systems, where there are movements of consumers, labor unions, women and children, and where the law is trying to protect the weaker segments of the population, the contractual interpretation has to develop with the time, based on the existing principles, so that the social equality and integrity will be well protected.