Short answer. Not the drafter's. Article 1377 provides that the interpretation of obscure words or stipulations shall not favour the party who caused the obscurity. Whoever wrote the unclear clause bears the cost of it, which in practice means the party who supplied the standard form loses the benefit of its ambiguity.
What the law says
The interpretation of obscure words or stipulations in a contract shall not favor the party who caused the obscurity.
Civil Code, Article 1377 — Ambiguity Against the Drafter (Contra Proferentem). Read the full provision →
The rule, and who it is aimed at
Article 1377 of the Civil Code is a single sentence: The interpretation of obscure words or stipulations in a contract shall not favor the party who caused the obscurity. It allocates a risk rather than reveals a meaning. Someone had to choose the words, and if they turned out to be capable of two readings, the party who chose them does not get to pick the reading that suits him now. In practice this weighs against banks, insurers, developers, lenders and employers, because they supply the printed form and the other side signs it as presented.
It only applies once the clause is genuinely obscure
This is the limit people miss. Article 1370 provides that if the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations controls. A clause is not obscure because it produces a harsh result, because the reader did not expect it, or because he would rather it said something else. Article 1377 comes into play only where the words really can bear more than one sensible reading. Courts do not rewrite plain language, and a party arguing ambiguity has to identify the two competing meanings before he can ask for the one that favours him.
Conduct is read before the dictionary is
Before reaching for a rule of last resort, the law looks at what the parties themselves showed they meant. Article 1371 directs that in order to judge the intention of the contracting parties, their contemporaneous and subsequent acts shall be principally considered. How the parties actually performed the disputed clause in the first months — what was billed, what was paid, what was delivered and accepted without objection — is often better evidence of its meaning than any argument about grammar. That is also why continuing to perform an unclear clause the other side's way can quietly settle the question against you.
If doubt still remains
Article 1378 supplies the residual rules. Doubts on incidental circumstances of a gratuitous contract are resolved in favour of the least transmission of rights and interests, and for an onerous contract the doubt is settled in favour of the greatest reciprocity of interests. Where the doubt goes to the principal object itself, so that the intention cannot be known, the contract is void. That last consequence is worth noting, because a party arguing hard that a central term is unintelligible may end up destroying the agreement rather than winning his reading of it.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Juana Almira, et al. vs. Court of Appeals, et al, G.R. No. 115966, March 20, 2003 — read the decision on LawPhil →
- Rizal Commercial Banking Corp. vs. Court of Appeals, et al, G.R. No. 133107, March 25, 1999 — read the decision on LawPhil →
- Edita A. De Leon, Lara Bianca L. Sarte and Renzo Edgar L. Sarte, G.R. No. 243733, January 12, 2021 — read the decision on LawPhil →
- F.F. Cruz & Co., Inc. vs. Jose B. Galandez, et al, G.R. No. 236496, July 8, 2019 — read the decision on LawPhil →
Related provisions
- Civil Code, Article 1377 — Ambiguity Against the Drafter (Contra Proferentem)
- Civil Code, Article 1370 — Literal Meaning Controls; Intent Prevails
- Civil Code, Article 1371 — Contemporaneous and Subsequent Acts
- Civil Code, Article 1378 — Doubts of Last Resort