Where the courts cannot achieve protection for a weaker party through statutory provisions, the courts could use interpretive principles to avoid contractual oppression by the stronger party. “Contracts should be read against the party that produces them. 34, Iran-US C.T.R.257 YCA (1987). Development of the contra proferentem rule for exemption and indemnity clauses. Contra Proferentem Doctrine Law and Legal Definition Contra Proferentem is a Latin term which means “against the offeror.” It refers to a standard in contract law which states that if a clause in a contract appears to be ambiguous, it should be interpreted against the interests of the person who insisted that the clause be included. If the meaning of a word or clause in a written document is not clear, or the word or clause is ambiguous, the verba fortuis accipiuntur contra proferentem rule applies. However, sometimes the doctrine of contra proferentem does not apply in insurance cases. Vecchio argues that the concept of contra proferentem should apply if there is any ambiguity over a policy. In other words this rule provides that if there is any doubt about the meaning or scope of an exclusion clause, the ambiguity should be resolved against the party seeking to rely on the exclusion clause. With the passage of … Contra proferentem applied in these cases holds parties to the terms they offered in negotiation and provides an incentive, especially for insurance companies who are … The decision. Contra proferentem helps to mitigate any unfairness by putting the onus on the drafter to be clear and precise, and giving the benefit of doubt to the party upon whom the contract is imposed as to what term that party actually agreed upon. Contra proferentem rule Practical Law UK Glossary 4-383-2653 (Approx. The contra proferentem rule, which requires any ambiguity in an exemption clause or indemnity clause to be resolved against the party who put the clause forward and relies upon it, originates in English law from the Privy Council decision in Canada Steamship Lines Ltd v The King [1952] AC 192. The Contra Proferentem features in American cases as well as in the Uniform Commercial Code and the Restatement (Second) of Contracts. Ct. 681 (1983). 12 As most clearly explained in a 1619 treatise by Antonius Faber, the rule had to be The contra proferentem rule states, broadly, that where there is doubt about the meaning of the contract, the words will be construed against the person who put them forward. In cases where parties do not have equal bargaining power, the courts may be more willing to find that the contra proferentem rule applies. Related Content. Example Contra Proferentem Case In a coverage dispute between two insurance companies in Economy Premier Assurance Co. v. Western National Mutual Ins. 11 Case No. And in these cases, it would be against the insurance companies.” It seems as if there has recently been a glut of upper court decisions on contractual interpretation.In Persimmon Homes Limited v Ove Arup & Partners Limited the principle of contra proferentem and the guidelines in Canada Steamship Lines Ltd v The King came under scrutiny.. Under the rule of Contra Proferentem, “where the Government draws specifications which are fairly susceptible of a certain construction and the contractor actually and reasonably so construes them, justice and equity require that that construction be adopted.” Folk Construction Co., Inc. v. United States, 2 Cl. Contra proferentem is a legal principle which, broadly speaking, means that where there is ambiguity in a contract, a clause will be construed against the party who put it forward and seeks to rely upon it.. Persimmon concerned the meaning of the words “liability for any claim in relation to … The Doctrine of Contra Proferentem is generally applied by the Judges in the later case where a contract appears ambiguous to them. 2 pages) Ask a question Glossary Contra proferentem rule.
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