Contract Interpretation and Supplementation : A Comparative Study of Finnish law, English law and the CISG

The purpose of this thesis is to compare Finnish law, English law and the CISG on how the methods of contract interpretation and supplementation ascertain contractual obligations. In other words, how a tribunal is required to examine and reason whether a contractual obligation to act in a certain way exists between the parties. The focus is on commercial contracts concluded in writing. First, this thesis examines Finnish law, English law and the CISG in separate chapters by using a structure that will reveal terminological and theoretical similarities and differences by analysing the theoretical basis of the methods as well as the main principles based on them. This part covers topics, such as what is meant under each law with interpretation and supplementation, the subjective and the objective theoretical approaches as well as with the intent of the parties and understanding of a reasonable person. Second, a comparison is made and conclusions are drawn on how the differences revealed in this thesis may affect a tribunal’s process of interpreting and supplementing a contract. Finally, the overall functionality of the methods is evaluated against the premise that they are expected to guide a tribunal to solve a contract dispute with the best possible outcome. The results of the comparison show that despite the methods under the laws reassemble each other and even use similar terminology, they include remarkable differences that can be traced to be based on the differences in the underlying theories. The difference causing most practical consequences appeared to be in the perspective of how words and expressions used by the parties should be understood. Mainly the question is whereas the words should be understood based on their ordinary meaning or by taking into account the context in which they were used. The evaluation of the functionality of the methods showed that all the laws can be set under certain criticism. It was seen as problematic in this thesis that the laws place the focus excessively on the parties’ communication when ascertaining the contractual obligations. This approach appeared not to properly take into account the fact that languages and human communication are always speculative because they lack a mathematic precision. This feature leads to the situation that interpretation based on parties’ communication will always guide to several different and even random consequences without properly considering what would be the best solution for the contractual dispute. Due to the unpredictability of these methods by law it is suggested in this thesis that contracting parties expressly regulate themselves how a tribunal should interpret and supplement the contract in their specific case. This could be done for example by stating specific values and goals that should be taken into account in order to limit the unpredictability of the interpretation and supplementation results