Contra Proferentem CASES
In English law, the contra proferentem rule is a principle of contractual interpretation stating that any ambiguity in contract terms is interpreted against the party who drafted or proposed the wording.
Definition and Principles
Contra proferentem (literally “against the offeror”) applies particularly to exclusion clauses or limitation clauses that seek to restrict liability. Where terms are unclear, the interpretation least favourable to the drafter is adopted.
Application
- Primarily applied to ambiguities in standard-form contracts or exclusion clauses.
- Encourages clarity and transparency from the drafting party.
Practical Importance
Businesses and individuals should draft clear, precise terms to avoid unintended interpretations and potential liability. Ambiguous clauses risk being rendered ineffective or narrowly interpreted.
Example Contexts
- Insurance contracts.
- Consumer agreements with complex exclusions.
- Standard business terms and conditions.
Home » Contra Proferentem
A newsagent hired a faulty tricycle from the defendants under a contract containing an exemption clause. He was injured and sued. The court held that the clause exempted the defendants from their strict contractual liability, but not from their parallel liability for negligence. Facts The plaintiff, a newsagent, hired a tradesman’s tricycle from the defendants for his newspaper round. The written hire agreement contained Clause 11, which stated: “Nothing in this agreement shall render the owners liable for any personal injuries to the riders of the machine hired”. While the plaintiff was riding the tricycle, the saddle tilted forward, causing
A customer's car was damaged by fire due to a garage's negligence. The garage sought to rely on an exclusion clause from previous invoices. The court held that three or four transactions over five years were insufficient to incorporate the term. Facts The plaintiff, Mr Walter Hollier, a private consumer, had his car repaired at the defendants’ garage, Rambler Motors (A.M.C.) Ltd, on three or four occasions over a period of five years. On at least two of these prior occasions, he had signed an invoice form which contained a clause stating: “The company is not responsible for damage caused
A fire caused by the Crown's employees' negligence destroyed goods in a shed leased to Canada Steamship Lines. The court established a seminal three-stage test to determine if an indemnity or exemption clause in their contract covered liability for negligence. Facts The appellant, Canada Steamship Lines Ltd., leased a freight shed on a wharf in Montreal harbour from the respondent, the Crown. The lease stipulated that the lessee (appellant) would not have any claim against the lessor (Crown) for damage to goods in the shed (Clause 17) and that the lessee would indemnify the lessor against all claims for injury
