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GLOSSARY

Contra proferentem rule definition

Published by a LexisNexis Commercial expert

What does Contra proferentem rule mean?

A traditional rule of construction is that if there is any ambiguity in a contractual term, the construction less favourable to the proferens will be adopted.

Who the proferens is any any situation, however, is unclear, being one or more of the person who drafted the clause; the person who sought its inclusion in the contract, and the person who seeks to rely on it.

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Contract interpretation—rules of contract interpretation

This Practice Note on rules on interpreting contracts (agreements) (also known as construing or the construction of contracts and contractual terms) considers key cases (Rainy Sky v Kookmin, Arnold v Britton, Wood v Capita) and specific rules (or canons) of construction. It should be read in conjunction with Practice Notes:•Contract interpretation—the guiding principles•How to approach a contractual interpretation dispute—a practical guideThe basic approach of contract interpretation as provided by Lord Hoffmann’s five principles in ICS v West Bromwich Building Society (see Practice Note: Contract interpretation—the guiding principles) is supplemented by general rules or guidelines (also known as 'canons of construction') which can be used to assist in ascertaining the meaning of a written contract. This Practice Note considers the most important of these guidelines, namely:•whole of the document relevant•commercial sense (business common sense) and avoiding an unreasonable outcome•cutting down rights and remedies•saving the document•consistency of terms•mistakes in the contract•contra proferentem principle•ejusdem generis principle•adjectives and determinators•do express terms negative implied terms when interpreting a contract?•weighing the evidence•no oral modification (NOM) clauses•unamended...

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Northern Rock avoids £258m compensation bill to UK taxpayers

Financial Services analysis: The Court of Appeal has ruled that when a lender uses documentation compliant with the Consumer Credit Act 1974 (CCA 1974) for loans outside that Act’s scope, the lending is not regulated by CCA 1974. David Bowden, freelance independent consultant, comments on the implications of the judgment that dealt with misrepresentation, limitation and the future of secured lending.

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