Subjective and Objective Approaches to Contractual Interpretation in Civil Law and Common Law Countries: Indonesia and Canada

Abstract

Traditionally, civil law adopts subjective approach, whereas common law adopts objective approach to contractual interpretation. This research aims to examine the difference in the application of contractual interpretation methods in Indonesia that adopts a civil law system and Canada that adopts common law system. The analysis defines the nature and content of common law and civil law, and the structures and methods of common law and civil law in contractual interpretation. The case study between Indonesia and Canada interestingly shows how their sources of law influence court’s approach to contractual interpretation. In their applications, Indonesia, as a civil law country, starts the interpretation exercise with subjective approach and Canada, as a common law country, starts it with objective approach. Nonetheless, in their processes of contractual interpretation, these two countries combine both subjective and objective approaches to achieve accuracy in contractual interpretation. On the other words, it is observed that subjective and objective approaches are completely intertwined and tangled with one another and cannot be separated. Therefore, practically, these two approaches are not mutually restricted of each other in all aspects.