Interpretation of a contract is taken from the wording of the contract

The interpretation of a contract is done in accordance with Article 1002 of the Civil Code and therefore, the interpretation should be extracted from the contract itself and not from evidence external to the written agreement

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Malcolm Mifsud
3 March 2016, 9:25am
The First Hall of the Civil Courts held in its judgement of 24 February, 2016 in Gordon and Charlene Farrugia –v- Aldo Farrugia, that if one is to interpret a contract one sees the wording of that contract and not other evidence that may be produced.

In their application Gordon and Charlene Farrugia explained that they purchased an apartment in Zurrieq together with half of an undivided roof. The contract was signed on 11 January, 2007. In resulted that Aldo Farrugia had purchased on 2 January, 2006 another apartment together with a part of a divided roof, which part is on the back of the same roof.

However, the contract did not include the plans in order to indicate this part of the roof. When the plaintiffs realised this, they tried to reach an agreement with Aldo Farrugia, but he is occupying more space on the roof than he should. However, the plaintiff argued that from the contracts it is clear that the intention was that the parties share a half of the divided roof, since they were the only two owners of the two apartments. They therefore asked the court to divide the roof amongst them equally.

Aldo Farrugia filed a statement of defence, stating that the action cannot succeed because the roof was sold as divided and as such there is no undivided part of the roof. Apart from this the defendant developed part of the roof and the plaintiffs did not object as per Article 571 of the Code of Organisation and Civil Procedure.

The Court held that what is being asked is to divide a roof amongst the parties of the case. The Court further held that contracts should be executed in good faith, however, the interpretation of a contract, should not depend on testimony or clarification on the part of the parties of the contract. In a previous judgment General Cleaners Limited -v- Accountant General, decided on 29 November, 2001, the court had established that the general principle at law and as mentioned in Article 1002 of the Civil Code, which states:

“1002.  Where, by giving to the words of an agreement the meaning attached to them by usage at the time of the agreement, the terms of such agreement are clear, there shall be no room for interpretation.”

Therefore, what the parties write in the contract should be respected. On the other hand according to another previous judgement Dr Joselle Farrugia -v- Pascal Demajo decided on 9 December, 2002, when the words on the contract do not compare to the intention of the parties, therefore the intention of the parties should prevail. The interpretation of a contract is done in accordance with Article 1002 of the Civil Code and therefore, the interpretation should be extracted from the contract itself and not from evidence external to the written agreement.

In this particular case the defendant purchased his property a year before the plaintiffs purchased their property. The words half of a divided roof at the back of the roof is clear. If the defendant purchased the half divided share, there is no reason to proceed further. 

Therefore, the court moved to dismiss the claim.

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Malcolm Mifsud is a partner at Mifsud & Associates.