Contra proferentem is a rule of contractual In law, a contract is an agreement between two or more parties which, if it contains the elements of a valid legal agreement, is enforceable by law or by binding arbitration. That is to say, a contract is an exchange of promises with specific legal remedies for breach. These can include Compensatory remedy, whereby the defaulting party is required interpretation which provides that an ambiguous term A contractual term is "Any provision forming part of a contract" Each term gives rise to a contractual obligation, breach of which can give rise to litigation. Not all terms are stated expressly and some terms carry less legal gravity as they are peripheral to the objectives of the contract will be construed against the party that imposed its inclusion in the contract – or, more accurately, against (the interests of) the party who imposed it. The interpretation will therefore favor the party that did not insist on its inclusion. The rule applies only if, and to the extent that, the clause was included at the unilateral insistence of one party without having been subject to negotiation by the counter-party. Additionally, the rule applies only if a court determines the term to be ambiguous Ambiguity is a condition where information can be understood or interpreted in more than one way and is distinct from vagueness, which is a statement about the lack of precision contained or available in the information. Context may play a role in resolving ambiguity. For example the same piece of information may be ambiguous in one context and, which often forms the substance of a contractual dispute.
It translates from the Latin Latin or sometimes Roman is an Italic language originally spoken in Latium and Ancient Rome. Although often considered a dead language, in view of the fact that it has no native, fluent speakers, Latin continues to be taught in schools and has been, and currently is, used in the process of new word production in modern languages from many literally to mean "against (contra) the one bringing forth (the proferens)."
The reasoning behind this rule is to encourage the drafter of a contract to be as clear and explicit as possible and to take into account as many foreseeable situations as it can.
Additionally, the rule reflects the court's inherent dislike of standard-form take-it-or-leave-it contracts A standard form contract is a contract between two parties that does not allow for negotiation, i.e. take it or leave it. It is often a contract that is entered into between unequal bargaining partners, such as when an individual customer is given a contract by the salesperson of a multinational corporation. The customer is in no position to also known as contracts of adhesion (e.g., standard form insurance contracts for individual consumers Consumer is a broad label for any individuals or households that use goods and services generated within the economy. The concept of a consumer occurs in different contexts, so that the usage and significance of the term may vary, residential leases, etc.). The court A court is a form of tribunal, often a governmental institution, with the authority to adjudicate legal disputes between parties and carry out the administration of justice in civil, criminal, and administrative matters in accordance with the rule of law. In both common law and civil law legal systems, courts are the central means for dispute perceives such contracts to be the product of bargaining between parties in unfair or uneven positions. To mitigate this perceived unfairness, legal systems The three major legal systems of the world today consist of civil law, common law and religious law. However, each country often develops variations on each system or incorporates many other features into the system apply the doctrine of contra proferentem; giving the benefit of any doubt in favour of the party upon whom the contract was foisted. Some courts when seeking a particular result will use contra proferentem to take a strict approach against insurers and other powerful contracting parties and go so far as to interpret terms A contractual term is "Any provision forming part of a contract" Each term gives rise to a contractual obligation, breach of which can give rise to litigation. Not all terms are stated expressly and some terms carry less legal gravity as they are peripheral to the objectives of the contract of the contract in favor of the other party, even where the meaning of a term would appear clear and unambiguous on its face, although this application is disfavored.
Contra proferentem also places the cost of losses on the party who was in the best position to avoid the harm. This is generally the person who drafted the contract In law, a contract is an agreement between two or more parties which, if it contains the elements of a valid legal agreement, is enforceable by law or by binding arbitration. That is to say, a contract is an exchange of promises with specific legal remedies for breach. These can include Compensatory remedy, whereby the defaulting party is required. An example of this is the insurance contract mentioned above, which is a good example of an adhesion contract. There, the insurance company is the party completely in control of the terms of the contract and is generally in a better position to, for example, avoid contractual forfeiture. This is a longstanding principle: see, for example, California Civil Code §1654 (“In cases of uncertainty ... the language of a contract should be interpreted most strongly against the party who caused the uncertainty to exist"), which was enacted in 1872. Numerous other states have codified the rule as well.
The principle has also been codified in international instruments such as the UNIDROIT The International Institute for the Unification of Private Law, also known as UNIDROIT, is an independent intergovernmental organisation. Its purpose is to study needs and methods for modernising, harmonising, and coordinating private international law and in particular commercial law between states, and to draft international Conventions to Principles and the Principles of European Contract Law.
Further reading
- Oxonica Energy Ltd v Neuftec Ltd (2008) EWHC 2127 (Pat), items 88-93 (example where the contra proferentem principle was "not adequate enough to supply the answer to the case", with a discussion of the origin of the maxim)
- Péter Cserne, Policy Considerations In Contract Interpretation: The Contra Proferentem Rule From a Comparative Law and Economics Perspective, Hungarian Association for Law and Economics, 2007 (pdf) (itself including a list of references relating to the contra proferentem principle)
Categories: Contract law A contract is a legally-enforceable promise or set of promises made by one party to another. A contract is a legally binding agreement concerning a bargain which is essentially commercial in its nature and involves the sale or hire of commodities such as goods services or land. Invalid tag extension name: categorytree | Latin legal phrases
