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''Contra proferentem'' ( Latin: "against heofferor"), also known as "interpretation against the draftsman", is a doctrine of contractual interpretation providing that, where a promise, agreement or term is
ambiguous Ambiguity is the type of meaning in which a phrase, statement or resolution is not explicitly defined, making several interpretations plausible. A common aspect of ambiguity is uncertainty. It is thus an attribute of any idea or statement ...
, 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 Bargaining power is the relative ability of parties in an argumentative situation (such as bargaining, contract writing, or making an agreement) to exert influence over each other. If both parties are on an equal footing in a debate, then they w ...
, 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 Eric Andrew Posner (; born December 5, 1965) is an American lawyer and legal scholar who has served as a counsel for the Department of Justice Antitrust Division since 2022. As a law professor at the University of Chicago Law School, Posner has ...
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 consumers, residential leases, airline contracts of carriage, 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 system The contemporary national legal systems are generally based on one of four basic systems: civil law, common law, statutory law, religious law or combinations of these. However, the legal system of each country is shaped by its unique history an ...
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 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, for example, to avoid contractual forfeiture.


Codification

The principle is codified in international instruments such as the UNIDROIT Principles and the
Principles of European Contract Law The ''Principles of European Contract Law'' (PECL) is a set of model rules drawn up by leading contract law academics in Europe. It attempts to elucidate basic rules of contract law and more generally the law of obligations which most legal syste ...
, 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 is an Act of Parliament of the United Kingdom that consolidates existing consumer protection law legislation and also gives consumers a number of new rights and remedies. Provisions for secondary ticketing and ...
, 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, family, and obligations. A jurisdiction that has a civil code generally also has a code of civil procedure. In some jurisdictions with a civil code, a number of the core are ...
, 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 or ...
§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") Numerous other states have also codified the rule.


References

{{reflist


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
(including a list of references relating to the ''contra proferentem'' principle) Contract law Legal rules with Latin names Legal doctrines and principles