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Contract law - contra proferentem

i can not get to grips with the 'contra proferentem' principle' :s-smilie:
Original post by jels123
i can not get to grips with the 'contra proferentem' principle' :s-smilie:


It's been a couple of years since I've done contra preferentum, but if it's in the context of exclusion clauses, it's basically a common law principle that in the case of ambiguity regarding a clause, the courts will construe the clause against the party seeking to enforce the exclusion clause. Unfortunately I can't seem to remember any case law at the moment, but I hope that at least explains the principle :smile:
If a term is reasonably capable of two meanings, it will be construed against the party offering the term. This will normally be the party who drafted the term, in the case of exclusion clauses it will be the party who is seeking to rely on the clause.

Its a long-standing historic principle of common law that is followed in all common law jurisdictions. The reason for the rule is that the party who drafted the term should have it made it clear.

Please note that you need to show ambiguity before the rules applies. You can't make up ambiguity using contra preferentem, the rule only kicks in if the clause is ambiguous to start with.
Original post by jacketpotato
If a term is reasonably capable of two meanings, it will be construed against the party offering the term. This will normally be the party who drafted the term, in the case of exclusion clauses it will be the party who is seeking to rely on the clause.

Its a long-standing historic principle of common law that is followed in all common law jurisdictions. The reason for the rule is that the party who drafted the term should have it made it clear.

Please note that you need to show ambiguity before the rules applies. You can't make up ambiguity using contra preferentem, the rule only kicks in if the clause is ambiguous to start with.


In Canada Steamship (1952) theres a 3 stage test
1 - if the clause contains an express reference to 'negligence' then it will be effective
2 - If theres no express reference to negligence, are the words wide enough to cover negligence. E.g 'howsoever caused 'customers own risk'
3- But even if the words are wide enough to cover negligence could the party in breach be liable on some ground other than negligence?

I understand part 1 of the 3stage test to mean that if you directly talk about negligence in your contract then that will be effective.
However i don't particularly understand 2/3

i presume 2 means that if you use words such as 'howsoever caused' in your contract that this may be enough to exclude liability, however it may also not be sufficient to exclude damage??

and number 3 i really don't understand. Say someone was guilty in tort and negligence, how does this apply? Does this mean the exclusion clause WILL work because you can sue them in tort?
Original post by lawstudent93
In Canada Steamship (1952) theres a 3 stage test
1 - if the clause contains an express reference to 'negligence' then it will be effective
2 - If theres no express reference to negligence, are the words wide enough to cover negligence. E.g 'howsoever caused 'customers own risk'
3- But even if the words are wide enough to cover negligence could the party in breach be liable on some ground other than negligence?

I understand part 1 of the 3stage test to mean that if you directly talk about negligence in your contract then that will be effective.
However i don't particularly understand 2/3

i presume 2 means that if you use words such as 'howsoever caused' in your contract that this may be enough to exclude liability, however it may also not be sufficient to exclude damage??

and number 3 i really don't understand. Say someone was guilty in tort and negligence, how does this apply? Does this mean the exclusion clause WILL work because you can sue them in tort?


Maybe an example will make it clearer.

Suppose I make a contract to sell you a computer for £100, and the contract has the following clause:

1) Forum User will take reasonable care and use reasonable skill to ensure that the computer is of satisfactory quality.
2) In the event of any loss or damage caused by a defective computer howsoever caused, Forum User will only be liable to a maximum of £100.

Suppose that for some reason you decide this contract is a good idea, and buy a computer from me, which is defective as a result of me negligently not checking some component, it blows up and causes £1,000 worth of damage to your room. Can I rely on my exclusion clause (applying only the three-stage test, obviously in practice UCTA or UCTTR might well apply)?

i) Does my exclusion clause explicitly mention negligence? No. (If it did, I could rely on it to exclude my negligence, obviously - barring the fact that it will be struck down elsewhere under UCTA).

ii) Is my clause wide enough to cover negligence? Yes - it says 'howsoever caused'. (If it was not wide enough, then obviously it wouldn't cover the breach and we would be done).

iii) Is my clause too wide? That is, is there some other ground except negligence that I might be liable under? Well, this is a contract for the sale of a computer, so the Sale of Goods Act applies. S14 implies a condition that the goods will be of satisfactory quality. The clause says 'howsoever caused' and therefore covers both negligence and strict contractual liability for breach of S14. Therefore it is *too wide* and the courts would consider that it covers me only for breach of my strict contractual liability and not for negligence.

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