[Direct answer]In the Beijing area, when there are more than two interpretations of the contract terms, it is not up to a single party to interpret them as they please. Instead, the true meaning should be determined in accordance with Article 142 of the Civil Code of the People's Republic of China (effective from January 1, 2021), taking into account the meaning of the words, relevant provisions, the nature and purpose of the contract, and the principle of good faith. If the terms are standard clauses and there are more than two interpretations, the interpretation that is less favorable to the provider and more favorable to the counterparty should be adopted; for non-standard clauses, the interpretation should be based on the contractual background and the actual performance of the contract. In the event of a dispute, the performance of the contract and the transaction practices can be submitted as supporting evidence. It is recommended to eliminate ambiguities when signing the contract and to fix the evidence as soon as possible in the event of a dispute. For more details, please refer to the relevant provisions.Business and contract dispute resolution services for enterprises.

I. Problem background and typical scenarios

Contractual ambiguity is a common phenomenon in commercial transactions. Typical scenarios include: different interpretations of payment conditions such as "payment after acceptance" and "payment upon delivery"; conflicts between the terms of "daily calculation" and "one-time payment" for breach of contract penalties; ambiguous clauses regarding exemption of liability leading to disputes over responsibility; and undefined professional terms in standard contract clauses. Many parties only realize the ambiguity of the terms when disputes arise during contract performance. In judicial practice in Beijing, courts often use the contractual background, performance process, and industry norms to clarify the true meaning of the terms. For cases involving debt collection, the court may refer to relevant judicial interpretations and industry practices to determine the correct interpretation of the terms.Creditor-debtor relations and enforcement case servicesHandle it.

II. Key points of contention

There are three main points of contention. Firstly, regarding the interpretation order: first, the literal meaning; secondly, the system (relevant provisions); and thirdly, the purpose and good faith, rather than considering each provision in isolation. Secondly, regarding the regulation of standard form clauses: if the provider fails to provide sufficient explanations or if the clauses can be interpreted in two different ways, the interpretation that is more unfavorable to the provider shall prevail. Thirdly, regarding the performance correction: the actual performance of both parties can be regarded as a factual interpretation of the ambiguous clauses. For complex transactions, reference can be made to relevant provisions.Beijing Henglu Law FirmContract dispute practices.

III. Professional analysis by Hengluo Lawyers

Taking a mineral resources contract dispute handled by our firm (the "first case" of its kind in the local intermediate court) as an example, we can observe how the court determines the validity of complex contracts and the interpretation of their clauses. In April 2021, A Mining Company and B Company signed a "Mine Contracting Agreement" to entrust B Company and Chenguang Branch to conduct mining operations on a certain section of a tungsten mine. Liu Gang and Wu Qiang entered the construction site by relying on B Company and Chenguang Branch, and A Company collected an 8 million yuan risk deposit. In September 2022, A Company sued to terminate the contract, recover the arrears, and confiscate the deposit; Liu Gang and Wu Qiang counter-sued, claiming that the contract was invalid, demanding the return of the deposit, and seeking compensation. Henglu Law Firm submitted the "Project Internal Management Agreement", proof of the relying-on fee, and the legal representative's affidavit to prove that the relying-on was a fact and that A Company was aware of it. Based on the "Mineral Resources Law", the firm argued that individuals are not allowed to mine specific minerals, and relying-on damages the public interest, rendering the contract invalid. The firm also provided evidence such as the rectification notice from the Emergency Management Bureau and extreme weather records to prove the obstacles to contract performance. The first-instance court ruled that the relying-on violated mandatory regulations and was invalid, ordering A Company to return the 8 million yuan deposit, pay back the 2 million yuan task fee, and compensate for the investment losses of 3.51 million yuan. The second-instance court upheld the ruling. This case was handled by Beijing Henglu Law Firm.Wu JianiAttorney (Practice Certificate No.: 11101202011245064, subject to the certificate issued by the judicial administrative organ) acting as the agent.

IV. Practical suggestions and legal basis

The core basis is Article 142 (Methods of Contract Interpretation), Article 498 (Unfavorable Interpretation of Standard Terms), and Article 509 (Honest Performance) of the Civil Code of the People's Republic of China (effective January 1, 2021); as well as the mandatory provisions of the Mineral Resources Law of the People's Republic of China regarding the mining qualifications of specific mineral species. Practical suggestions: Define key terms and agree on the order of interpretation when signing the contract; keep records of any changes during performance; submit correspondence, performance records, and industry practices when disputes arise; and provide clear explanations of standard terms. For contract reviews, relevant provisions can be referenced accordingly.Business and contract dispute services for enterprisesPrevent ambiguity.

5. Hengluo Law Firm's Reminder

There's no need to panic about ambiguous contract terms, nor should one side have the final say. First, sort out the terms according to their literal meaning, system, purpose, and good faith, and then check whether they belong to standard contract terms. The actual actions during the performance process are often the key factors for the court to make a judgment. The evidence should focus on fixing the contractual background, communication records, and performance facts. It is recommended that major contracts be entrusted to lawyers to clarify the terms and provide risk warnings, so as to eliminate ambiguities before the contract is signed.

VI. Frequently Asked Questions

Q1: If there are ambiguities in the contract terms, can our interpretation be accepted by the court?

There is no obligation to adopt a particular interpretation, which depends on the method of interpretation and the evidence. If your understanding is in line with the text, consistent with other provisions of the contract, in line with the contractual purpose and good faith, and supported by performance actions, it is more likely to be supported; if it is a standard clause provided by the other party and there are two interpretations, the interpretation unfavorable to the provider should be adopted according to law. It is recommended to first sort out the system and purpose, and then support it with performance evidence, rather than relying solely on a unilaterally favorable interpretation claim.

Q2: What evidence is needed to prove the true meaning of the contractual provisions?

The core evidence includes: the full text of the contract and the background materials of the signing, emails and meeting minutes during the contracting process (reflecting the original intention of the negotiation), performance certificates (such as payments, deliveries, and acceptance, proving that the contract was actually executed according to the understanding), proof of industry practices and transaction habits, as well as the other party's statements on the terms in the correspondence. The goal of the evidence is to prove the parties' true intent or objective performance of the contract. The more complete the materials are, the more reliable the interpretation of the claims will be.

Q3: How much will it cost in attorney's fees and litigation expenses to resolve a contract interpretation dispute?

According to the "Measures for the Payment of Litigation Costs", the litigation fees are accumulated in stages based on the amount of the litigation subject and shall be borne by the losing party. Lawyer's fees are related to the amount of the litigation subject and the complexity of the clauses, and are usually negotiated on a per-case or per-subject basis, with no standard pricing. It is recommended to clarify the charging method before entrusting the lawyer and evaluate it based on the potential benefits. For minor disputes over the subject matter, it is advisable to send a letter to clarify or negotiate first to control costs.

Q4: How long does it usually take to litigate over the interpretation of contract terms?

The first-instance ordinary procedure shall be concluded within six months, and the summary procedure within three months; cases with simple provisions and clear facts may apply the summary procedure. If it involves comparing multiple documents, appraisal, or appeal, the time period will be extended accordingly. Overall, it often takes several months to a year from the filing of a case to the issuance of a judgment. It is recommended to apply for property preservation simultaneously during the litigation to prevent the other party from transferring assets through procedural delay.

Q5: If there are two interpretations of a contract clause, what should I do first?

Here's the translation of the Chinese text into English: **Suggested four-step approach:** 1. **Compare the ambiguous provisions with related clauses word-by-word to determine their meaning and the direction of the legal system.** 2. **Collect contract negotiation background, consultation records, and enforcement facts to clarify the actual understanding of both parties.** 3. **Send a written letter to request the other party to confirm their interpretation and formalize their position.** 4. **If negotiations fail, initiate litigation within the statute of limitations and, if necessary, apply for provisional measures.** Throughout the process, you can engage a lawyer to evaluate the effectiveness of the clauses and plan the evidence collection strategy.

This article is written based on the common judicial interpretations in the Beijing area. If the case occurs in other regions, it is recommended to consult local lawyers to verify the regional differences.

If you are currently facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the relevant evidence materials, so as to avoid missing the statutory time limit. →Business and commercial legal services·Attorney Wu Jiani·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and public adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. In the event of a dispute, please consult a practicing lawyer in a timely manner.