Contra proferentem

Contra proferentem

Contra proferentem is a doctrine of contractual interpretation which provides that an ambiguous term 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.[1] 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, which often forms the substance of a contractual dispute.

It translates from the Latin 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 also known as contracts of adhesion (e.g., standard form insurance contracts for individual consumers, residential leases, etc.). The court perceives such contracts to be the product of bargaining between parties in unfair or uneven positions. To mitigate this perceived unfairness, legal systems 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 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. 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 Principles and the Principles of European Contract Law.

Further reading


References

  1. ^ International principle: Trans-Lex.org

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Look at other dictionaries:

  • Contra proferentem — El principio de interpretación “contra proferentem”, también denominado interpretatio contra stipulatorem , establece que cuando no es posible hacer una interpretación literal de un contrato por causa de cláusulas ambiguas o contradictorias, la… …   Wikipedia Español

  • contra proferentem rule — a rule of interpretation that demands that the words to be construed should be construed against the party seeking to utilise them. Thus, in the law of contract an exemption clause is construed against the party founding on it, as are contracts… …   Law dictionary

  • contra proferentem — A rule of interpretation primarily applying to documents. If any doubt or ambiguity arises in the interpretation of a document, the rule requires that the doubt or ambiguity should be resolved against the party who drafted it or who uses it as a… …   Big dictionary of business and management

  • contra proferentem — /kontra profarentam/ Used in connection with the construction of written documents to the effect that an ambiguous provision is construed most strongly against the person who selected the language. U. S. v. Seckinger, 397 U.S. 203, 216, 90 S.Ct.… …   Black's law dictionary

  • contra proferentem — /kontra profarentam/ Used in connection with the construction of written documents to the effect that an ambiguous provision is construed most strongly against the person who selected the language. U. S. v. Seckinger, 397 U.S. 203, 216, 90 S.Ct.… …   Black's law dictionary

  • contra proferentem — Against the offeror; against the party offering the evidence …   Ballentine's law dictionary

  • contra preferentem — /kontra prefarentam/ Against the party who proffers or puts forward a thing. As a rule of strict construction, contra proferentem, requires that contract be construed against person preparing terms thereof. Matter of City Stores Co., Bkrtcy.N.Y …   Black's law dictionary

  • contra preferentem — /kontra prefarentam/ Against the party who proffers or puts forward a thing. As a rule of strict construction, contra proferentem, requires that contract be construed against person preparing terms thereof. Matter of City Stores Co., Bkrtcy.N.Y …   Black's law dictionary

  • ambigua responsio contra proferentem est accipienda — /aembigyuwa rasponsh(iy)ow kontra profarentam est aksipiyenda/ An ambiguous answer is to be taken against (is not to be construed in favor of) him who offers it …   Black's law dictionary

  • ambiguum placitum interpretari debet contra proferentem — /sembigyuwam plaesatam intarprateray debat kontra profarentam/ An ambiguous plea ought to be interpreted against the party pleading it …   Black's law dictionary

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