''Contra proferentem'' (

Latin Latin ( or ) is a classical language belonging to the Italic languages, Italic branch of the Indo-European languages. Latin was originally spoken by the Latins (Italic tribe), Latins in Latium (now known as Lazio), the lower Tiber area aroun ...

: "against heofferor"), also known as "interpretation against the draftsman", is a

doctrine Doctrine (from , meaning 'teaching, instruction') is a codification (law), codification of beliefs or a body of teacher, teachings or instructions, taught principles or positions, as the essence of teachings in a given branch of knowledge or in a ...

contract A contract is an agreement that specifies certain legally enforceable rights and obligations pertaining to two or more parties. A contract typically involves consent to transfer of goods, services, money, or promise to transfer any of thos ...

ual interpretation providing that, where a promise, agreement or term is ambiguous, the preferred meaning should be the one that works against the interests of the party who provided the wording.

Overview

The doctrine is often applied to situations involving standardized contracts or where the parties are of unequal bargaining power, but is applicable to other cases. The doctrine is not, however, directly applicable to situations where the language at issue is mandated by law, as is often the case with insurance contracts and bills of lading. 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. Eric Posner claimed: "The contra proferentem rule, for example, might encourage the drafter to be more explicit and to provide more details about obligations. This may reduce the chance that the other party will misunderstand the contract; it also may facilitate judicial interpretation of the contract." Uri Weiss claimed: "The Contra Proferentem rule motivates the less risk-averse drafter to refrain from manipulating the other side by making the contract unclear. Thus, the two parties can agree that the less risk-averse side will formulate the contract, thus reducing the cost of the transaction. Without this rule, there might be a moral hazard problem". 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

consumer A consumer is a person or a group who intends to order, or use purchased goods, products, or services primarily for personal, social, family, household and similar needs, who is not directly related to entrepreneurial or business activities. ...

s, residential leases, airline contracts of carriage, etc.). The

court A court is an institution, often a government entity, with the authority to adjudicate legal disputes between Party (law), parties and Administration of justice, administer justice in Civil law (common law), civil, Criminal law, criminal, an ...

perceives such contracts to be the product of bargaining between parties in unfair or uneven positions. To mitigate this perceived unfairness,

legal system A legal system is a set of legal norms and institutions and processes by which those norms are applied, often within a particular jurisdiction or community. It may also be referred to as a legal order. The comparative study of legal systems is th ...

s apply the doctrine of ''contra proferentem''; giving the benefit of any doubt in favor of the party that did not provide the contract. ''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

. 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, for example, to avoid contractual forfeiture.

Codification

The principle is codified in international instruments such as the

UNIDROIT UNIDROIT (formally, the International Institute for the Unification of Private Law; French: ''Institut international pour l'unification du droit privé'') is an intergovernmental organization whose objective is to harmonize private internati ...

Principles and the Principles of European Contract Law, and in some examples of national law: *in United Kingdom law, with respect to consumer contracts, under Section 69 of the

Consumer Rights Act 2015 The Consumer Rights Act 2015 (c. 15) is an act of Parliament of the United Kingdom which consolidates existing consumer protection law legislation and also gives consumers a number of new rights and remedies. Provisions for secondary ticketi ...

, which states "''If a term in a consumer contract, or a consumer notice, could have different meanings, the meaning that is most favourable to the consumer is to prevail''". *in the Brazilian

Civil Code A civil code is a codification of private law relating to property law, property, family law, family, and law of obligations, obligations. A jurisdiction that has a civil code generally also has a code of civil procedure. In some jurisdiction ...

, which states that any legal transaction should be interpreted in a way that benefits the party who did not write the terms (article 113, § 1º, IV). *

California Civil Code The Civil Code of California is a collection of statutes for the State of California. The code is made up of statutes which govern the general obligations and rights of persons within the jurisdiction of California. It was based on a civil code o ...

§1654, enacted in 1872, states "In cases of uncertainty ... the language of a contract should be interpreted most strongly against the party who caused the uncertainty to exist") * South Korea's ACT ON THE REGULATION OF TERMS AND CONDITIONS §5 states "If the meaning of terms and conditions is not clear, it shall be construed in favor of customers." Numerous other states have also codified the rule.

References

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Overview

Codification

References

Further reading