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Abstract

The principle of freedom of contract is a basic principle in Civil Law. So, the parties are free to make their contract with whom they want. But by the law of representation, in the cases, when an agent acts in the name of a principal, its acts bind the principal and the other party directly each other. The agent is not bind personally to the other party. But, the actor acts on instructions and on behalf of, but not in the name of, a principal, the other party neither knows nor could have known that the intermediary acts an agent, the intermediary and the other party may be bound to each other. Sometimes, an actor, in spite that he is the true beneficiary of the contract, may conclude a contract under the name of a principal, who has no intention of bounding any legal obligations. In this case, the counter party may have known who is the true beneficiary or not. As the simulation, a contract is concluded with one person who will be really substituted, between the parties, it is the secret contract which prevails an apparent agreement within the limits of legal system, but the third party who acquires the rights in good faith of an apparent agreement is protected by Civil Law §108 Ⅱ. And the freedom of contract is within the limits of legal system, so when the parties deviate from the mandatory rules, it may lead to be void. It is important to determining who are the parties of the contracts, the relationship of the contract is established between the parties themselves and it may be necessary before determining the validity of the contract or a non-performance. Determining the exact parties of contracts can be dissolved by the interpretation of contract because the factor of the party is the content of the contract. The contents of contract are to be interpreted according to the common intention of the parties in spite of the literal meaning of the words. If an intention cannot be known, it is necessary to be interpreted according to the understanding that a reasonable person of the same kind as the other party would have had in the same circumstances. In determining the intention of a party or the understanding a resonable person would have had, due consideration to be given to all circumstances of the case including the characteristic of the contracts, the contents, the negotiations, an practices which the parties have established between themselves, and usages. When a contract contains "Lücke" which is needed to be filled, the process may be referred to completive interpretation. This paper deals with the court's decision according to the characteristic of contracts, and contrives to get the understanding of the rule in determining the parties of contracts in the cases.