ARTICLE 1378

When despite the application of the preceding rules (arts. 1370-1377.), certain doubts still exist,
such doubts shall be resolved in accordance with the supplementary rules stated in the Article 1378.

1. Gratuitous contract. – If the doubt refer to incidental circumstances of a gratuitous contract, such
interpretation should be made which would result in the least transmissible of rights and interests.

e.g.

A gave his car to B.

It is not clear whether the contract is a donation or a commodatum.

Commodatum is lending a movable property to be returned undamaged to the lender.

The contract here should be presumed as a mere commodatum because it would transmit lesser rights
than a donation since A retains his ownership of the car.

2. Onerous contract. – If the contract in question is onerous, the doubts should be settled in favor of the
greatest reciprocity of interest.

e.g.

A borrowed from B 5,000 at 12% interest.

It cannot be determined from the terms of the contract whether the loan is payable in 6 months or in 1
year.

It must be assumed that the period agreed upon is 1 year which results in a greater reciprocity of
interests since A can use the money for 1 year, and B, can earn interest due for 1 year instead of only 6
months.

3. Principal object of the contract. – If the doubt refers to the principal object of the contract and such
doubt cannot be resolved thereby leaving the intention of the parties unknown, the contract shall be
null and void.

e.g.

A sold to B his land.

A has many lands. It cannot be determined which land was intended by the parties to be the subject of
the sale.

Therefore, the contract shall be null and void.

ARTICLE 1378
These are the classifications of defective contracts:

 Rescissible contracts

 Voidable or annullable contracts

 Unenforceable contracts

 Void or inexistent contracts

Illustration:

Mr. A is a businessman and he really want to buy the rice field of Mr. B for the construction of
his commercial building. He issued a written contract to Mr. B who is a farmer and the owner of 15
hectares of rice field, since Mr. B doesn’t know how to read and right, Mr. A should interpret first the
written contract that he issued to Mr. B before the latter agreed and signed upon it because according
to art. 1379 The interpretation stated in Rule 123 of the Rules of Court shall likewise be observed in the
construction of contracts which stated in “Sec.10 Interpretation of a writing according to its legal
meaning – that the language of a writing is to be interpreted according to the legal meaning it bears in
the place of its execution, unless the parties intended otherwise.”.