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Editing Contracts/Contra proferentem
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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. | 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. | ||
University of keele v price Waterhouse case reflects the contra proferentum rule applied against the defender who tried get out of a unclear clause. | |||
Additionally, the rule reflects the court's inherent dislike of [[Standard form contract|standard-form take-it-or-leave-it contracts]] also known as contracts of adhesion (e.g., standard form insurance contracts for individual [[consumer]]s, 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 system]]s apply the doctrine of ''contra proferentem''; giving the benefit of any doubt in favor of the party upon whom the contract was foisted. | Additionally, the rule reflects the court's inherent dislike of [[Standard form contract|standard-form take-it-or-leave-it contracts]] also known as contracts of adhesion (e.g., standard form insurance contracts for individual [[consumer]]s, 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 system]]s apply the doctrine of ''contra proferentem''; giving the benefit of any doubt in favor of the party upon whom the contract was foisted. | ||
''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 | ''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 is codified in international instruments such as the [[UNIDROIT]] Principles and the [[Principles of European Contract Law]]. | The principle is codified in international instruments such as the [[UNIDROIT]] Principles and the [[Principles of European Contract Law]]. |