Effectiveness Principle in Interpretation of Contracts

One of the most important and complex issues of contract law is the isuue of interpretation. Indeed, interpretation of contract is the connecting bridge between the theoretical aspect of law and what happens in the outside world and the application arena. The art of a judge is to resolve the ambiguity of the contract by the use of principles and rules governing the interpretation. Interpretation system has its own rules and tools on the basis of which the discovery of the common intent is possible. One of the interpretation techniques that have very privileged role in defining the terms of the contract and clarifying its concepts is the principle of effectiveness. The principle of effectiveness has been accepted in Islamic and Iranian law (Article 223 Civil Code). This principle is recognized as a universal rule in other legal systems and international legal instruments and practices. The important point is that there is difference between the legal conception of the principle of effectiveness in Iranian law and what is found in international trade law and the law of western countries. It seems that the principle of effectiveness in interpretation of contract in western legal tradition is not completely compatible with its usage in our legal system. The present study tries to explore the said principle and its differing conceptions and the ensuing legal effects.