Manner of interpreting declarations of intent, including in the light of concluding acts

Article 65 of the Civil Code sets out the fundamental principles governing the interpretation of declarations of intent.

In accordance with the aforementioned provision:

• A declaration of intent must be interpreted as required by the circumstances in which it was made, the principles of social coexistence and established customs.
• In contracts, one should rather examine the mutual intention of the parties and the purpose of the contract, rather than rely on its literal wording.

It is clear at first glance that the wording of the provision in question allows for a degree of interpretative freedom, and thus gives the court adjudicating the case some discretion as to how to interpret a declaration of intent. For this reason, the provision in question has been the subject of extensive scholarship and has been developed through case law, meaning that we can speak of an established interpretative approach.

This approach can be defined as follows. The starting point for interpreting declarations of intent should be to determine the content and purpose of the contract and the legal relationship it creates. In doing so, one must take into account the mutual intention of the parties, the content of the contract—including the relationships between its provisions—the circumstances of the contract’s conclusion, and other factors specified in Article 65 and Article 66 of the Civil Code, as well as the principle of favour contractus; and, in case of doubt, attribute to the provision a meaning that will allow it to remain valid.

The manner in which the parties understood the declaration of intent at the time of its making may be demonstrated by any means of evidence. If it transpires that the parties did not attribute the same meaning to the declaration of intent, the meaning determined in accordance with an objective standard of interpretation—that is, the meaning as understood and as the addressee ought to have understood it—shall be deemed legally binding. In this case, the decisive factor is the understanding of the declaration of intent resulting from the addressee’s careful interpretative efforts. In the case of a declaration in writing, the meaning of the declaration of intent is determined on the basis of an interpretation of the text of the document. Linguistic norms of meaning play a fundamental role here. In order to determine how the parties actually understood the declaration of intent at the time of its submission, their conduct following the submission of the declaration and the manner of performance of the contract may also be relevant. (Supreme Court ruling of 13 January 2023, ref. no. I CSK 3324/22).

The parties’ common intention and the purpose of the contract are manifested not in the content of the contract (which usually corresponds to statutory models), but in the manner of its performance, which reveals the parties’ actual intentions. Within the meaning of Article 65 § 2 of the Civil Code, the purpose of the contract is determined by the function which the parties attribute to a given act within the legal relationship binding them. The purpose of the contract should be specific to that particular contract and disclosed to the parties. The purpose of the contract shapes the rights and obligations of the contracting parties, indirectly, as one of the factors that should be taken into account when interpreting the contract. The purpose need not be articulated in the text of the contract, but may be determined on the basis of the circumstances surrounding the performance of the legal act. The purpose of a contract may be defined as the parties’ intention regarding the establishment of a legal relationship. Determining the purpose of a contract is of paramount importance, as a conflict between the purpose of the transaction and the law leads to the invalidity of the legal transaction. By contrast, the mutual intention of the parties is expressed in the agreement on material circumstances and may be defined as the parties’ intention regarding the legal consequences to arise in connection with the conclusion of the contract (Supreme Court ruling of 25 January 2023, ref. no. I USK 95/22).

Importantly, the above principles are equally significant in the context of so-called implied acts.

A legal act is effected by implied facts if they express the unambiguous content of a declaration of intent; however, they cannot serve as a basis for attributing legal effects to acts which do not arise from them.

The content of a legal act and the intention of the parties should be determined and interpreted in accordance with the principles set out in Article 65 of the Civil Code. When applying the rules contained therein, it may transpire that, contrary to the wording of a specific contractual provision, the parties’ intention is different. Article 65 § 2 of the Civil Code requires that, when interpreting a declaration of intent, one must take into account “the circumstances in which it was made” and, against this background, examine what the parties’ mutual intention and the purpose of the contract were, rather than relying on its literal wording. (judgment of the Court of Appeal in Poznań of 12 December 2022, I ACa 525/21).