Amir Azarbad

Interpretation of International commercial Contracts

Hello honorable readers,

As we know, every international transaction and contract may be exposed to interpretation by judges or arbitrators they are referred  the case or dispute, so interpretation’s rules are important to lawyer setting out a contract.

they have to know how interpretation can be applied on the written phrases. and they also have to try set the phrases of international commercial contract along what arbitrators or judges interpret.

Among interpretation rules,”Whereas Clause” is the subject  I am going to write about.

as we know, a contract includes rights and obligations of  parties, as usual, in a contract and transaction is specified two articles on “Obligation of party 1 for example Seller and also for Buyer, and should a party want to add a obligation, that Article will be the proper place for, but in interpretation of a contract, the judge or arbitrator is not limited to those article. specially, whenever he is searching to find out implied obligation or how an obligation is to be done.

for example, if a dispute between parties to sale contract is over  this : is the seller  under responsibility to pack the material according to standard packing rules of Iran?

and the contract is free of such obligation, but the parties in “Whereas Clause” have mentioned “the buyer’s intention is exporting the materials to Iran” or the Buyer desires to export the materials to Iran, despite this obligation is not in Article of Seller’s Duties, but the obligation of the seller may be interpreted in basis of “Whereas Clause” and an arbitrator or judge may issue an award and seller is under responsibility to comply with That standard in packing.

another item which performs main role in interpretation of International commercial contract is “Good Faith”.

behaviors of parties of a commercial contract in concluding and performing, will be interpreted in base of Good Faith. parties comes from different countries with different legal systems, and commercial world not a good place for a malicious man. so, even a word in a contract has been select in wrong manner, may be interpreted in proper meaning and in contract purpose.

Amir Azarbad-

Ph.D Candidate in private law

Iranian attorney at law in International Transaction/Commercial Contracts/Arbitration