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The content concerns Finnish legislation.
 

Agreement interpretation

Disagreements concerning the content of an agreement may be various. In court, uncertainties concerning the agreement have to be removed by proof and rules concerning the burden of proof indicate which party must provide proof. Principally, both parties must demonstrate those facts and circumstances that they invoke for their benefit but in the event of a tie, the plaintiff loses.

A gap in an agreement can sometimes be filled by supplementary material, such as legislation or the contents of an established commercial practice. A commercial practice may not usually be invoked against a consumer, even though a consumer may invoke it against an entrepreneur. Supplementary material is always secondary. An agreement between parties must always be followed, unless it is in conflict with a peremptory provision.

Sources that are used to clear the contents of an agreement may be sorted into a hierarchy as follows:

  1. peremptory provisions;

  2. the agreement and what can be construed as being agreed;

  3. commercial, or other comparable practice;

  4. provisions that the parties may deviate from by agreement.

The aim of agreement interpretation is to examine what the parties meant by the agreement. If the mutual will and purpose of the parties can be found, it will supersede other interpretation material, even the written agreement. However, this rule may not apply to internationally oriented agreements, especially when the governing law is from a country following an Anglo-Saxon common law legal system.

Principally, the unclarity of an agreement is resolved by using the material that concerns it. Materials used in interpreting the agreement may be e.g. previous action of the parties, agreement negotiations, correspondence, circumstances at hand when drafting the agreement, choice of words, general use of language and professional terminology.

Temporally, that which has been agreed later supersedes that which has earlier been in force. If the agreement contains several documents (main agreement and appendices), conflicts may occur within the documentation. Therefore, it is recommended to have a provision in the agreement stating in which order the documents will be applied.

Some recommendations exist for interpreting agreements. For example, an unclear agreement may be interpreted to the author's detriment. Provisions limiting liability are commonly interpreted narrowly.