Contra proferentem
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Construction contra proferentem is the rule of contract interpretation that where a provision's meaning is ambiguous, it should be read against the party who wrote it. That is, the preferred interpretation will be the one that helps the party who drafted it the least.
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 he can.
Additionally, the rule reflects the court's inherent dislike of standard-form take-it-or-leave-it contracts (e.g., standard form agreements all club members must sign). The court perceives such contracts as displaying an unfair or uneven bargaining position. To compensate for this, the court applies contra proferentem to take a strict approach and at times, striking down the terms to the favour of the other party.
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, a great example of the contract of adhesion, above. There, the insurance company is the party that is 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 principle of long standing. 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." California enacted this section in 1872. Numerous other states have codified the rule as well.
As of today, 2006, international legislation such as the European Principles of Contract Law, have also codified this rule of law. Also, in arbitration procedure of the ICC (International Chamber of Commerce) there are (few) cases in which arbitrators recall the principle of contra proferentem in their legal reasoning. Last but not least, this principle has also been used by teams of many different universities of many different countries, when they met in Vienna in 2006 for the Willem C Vis International Commercial Arbitration Moot (e.g. Chapter 1 of the Claimant Memorandum of the RuG University, NL).
The term is frequently mis-spelled "contra proferentum". The derivation is the Latin contra (against) proferentem (the one bringing forth).
Attractive nuisance · Calculus of negligence · Caveat emptor · Caveat venditor · Contra proferentem · Duty of care · Eggshell skull · Fair use · First-sale doctrine · Good-faith exception · Living tree doctrine · Ignorantia juris non excusat · Implied powers · Implied terms of a contract · Odious debt · Plain view doctrine · Proximate cause · Res ipsa loquitur · Sovereign immunity · Stare decisis or Precedence rule · Standard of care · Unclean hands · Vicarious liability ·
