7.2 Interpretation of commercial contracts

Given the position stated in Chapter 1 that reasonableness and fairness is a mandatory norm of conduct, we have seen that the concept of an agreement having binding force has a new foundation. The same is true of the doctrine of contractual interpretation. Interpretation is quite often considered to be pre-eminently a judicial duty. It is generally accepted that the legal norm to be used for such interpretation is the principle of reasonableness and fairness. If this conceptual dyad is only or primarily regarded as a vague or open norm for judicial decision-making (as often seems to be the case), the judicial interpretation and the norms of reasonableness and fairness coincide, the consequence of this being that under the guise of reasonableness and fairness the courts can give the interpretations they `reasonably' see fit. In this event, reasonableness may become a synonym for 'complete judicial discretion" (freies richterliches Ermessen) and a facade for `arbitrariness and choice at will'.1 This is not the case if the interpretation doctrine is approached from the perspective of the role of reasonableness and fairness as a norm of conduct, as was done in Chapter 3 (as a consequence of the choice made in Chapter 1). If this approach is taken, the focus of the interpretative role of the courts is shifted to the parties and room is made for the idea that the interpretation of agreements is not a matter reserved for the courts, but is mainly to be considered a duty of the parties themselves (and quite often one that is indispensable to the performance of the agreement). This duty to interpret must be performed by the parties - just as they have an obligation to perform the agreement itself - in accordance with article 6:2 of the Dutch Civil Code. This article requires contractual parties to act reasonably and fairly towards one another, which entails the parties also being obliged to take each other's legitimate interests into account when interpreting their agreement. In this process they are also required to abandon their personal preferences and arbitrariness and to attach conclusive significance to the circumstances of the concrete case, valued in accordance with what the norms of reasonableness and fairness demand. I have shown in Chapter 3 that construing the interpretation process from the parties' point of view in such a manner contributes to a better understanding of the way in which (commercial) contracts have to be interpreted and to a better understanding of leading case law of the Dutch Supreme Court on this subject. Particular attention was given in this respect to the well-known judgment in the PontMeyer case. It was found that a meaningful construction could not be given to this judgment unless in light of the character of reasonableness and fairness for setting a norm of conduct, in such manner that this judgment does not provide evidence of the diminution of reasonableness and fairness when commercial contracts are interpreted, but rather confirms that, even for this type of contract, the requirements of reasonableness and fairness dictate the interpretation of the agreement in the manner described above.