The Contra Proferentem Rule III

The Contra Proferentem rule is a principle of last resort.

North v. Marina, [2003] NSWSC 64.

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In Fruit Juice Stalls, [Civil Appeal Nos. 618-620 of 2016] Senior Advocate Raju Ramchandran has quoted K. Mohandas, (2009) 5 SCC 313 to elaborate upon the Contra Proferentem rule.

The rule is a “a late‐inning tiebreaker, one used when the more probative and obvious methods have failed”. He who formulates terms bears the risk of lack of clarity, if any. If the terms applied by one party are unclear, an interpretation against that party is preferred. “The words of documents are to be taken strongly against the one who puts forward”.

Is the relevant “one who puts forward” the one who puts forward the whole document, or the one who puts forward the particular words which are being talked about? Is it the person who actually prepared the document or clause in question, or is it someone who should be taken, from the nature of the document, to have put the document or clause forward? And if the latter, by reference to what does the Court decide who ought to have been taken to have put forward the particular document or words?

One stream of authority, applied particularly in connection with insurance contracts, proceeds on the basis that one party has the responsibility for putting forward the entire document, and hence the document will be construed against that party, even if the other party has had some involvement in its drafting. Other cases have been prepared to look at who it was who introduced particular words into the contract.  The enquiry into who put forward the words is treated as an exercise in the analysis of the document, to decide who ought be taken to be saying certain words. This approach was adopted by Hoffmann J in Amax International, concerning construction of a rent clause in a lease, “the fact that the tenant is the covenantor and therefore technically the proferens.”

Lord Hoffmann

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