Legal Definitions - contra proferentem

Contra proferentem is a fundamental rule used in legal interpretation, particularly for contracts. It states that if a term or phrase within a contract is unclear, ambiguous, or open to multiple reasonable interpretations, that ambiguity should be resolved against the party who drafted the contract.

The principle behind contra proferentem is to place the responsibility for clear communication on the party who had the power and opportunity to write the contract's terms. If they failed to make their intentions clear, they should bear the consequence of that lack of clarity, rather than the other party who merely accepted the terms. This rule is especially important in situations where one party has significantly more bargaining power and presents a "take-it-or-leave-it" contract, leaving the other party with no opportunity to negotiate the language.

Here are some examples illustrating how contra proferentem might apply:

• Residential Lease Agreement: Imagine a tenant signs a lease agreement, drafted by the landlord, which includes a clause stating, "No alterations to the property without prior written consent." The tenant later installs removable, self-adhesive wallpaper in a bedroom, which causes no damage upon removal. The landlord attempts to charge the tenant for "unauthorized alterations."
  Application of contra proferentem: The term "alterations" is ambiguous. Does it include temporary, non-damaging cosmetic changes like self-adhesive wallpaper, or only permanent structural changes? Since the landlord drafted the lease and could have specified "no changes to wall coverings" or "no wallpaper of any kind," a court applying contra proferentem would likely interpret "alterations" narrowly against the landlord, favoring the tenant's reasonable belief that temporary, non-damaging decor was not prohibited.
• Software End-User License Agreement (EULA): A user downloads a new software application and agrees to its EULA, which was drafted by the software company. A clause in the EULA states that the company is not liable for "any consequential damages arising from the use or inability to use the software." Due to a bug in the software, the user's computer crashes, leading to the loss of several hours of unsaved work on a different application. The user seeks compensation for the lost productivity.
  Application of contra proferentem: The term "consequential damages" can be broad. Does it include the loss of productivity from unsaved work caused by a system crash, even if that work was not directly within the buggy software? Since the software company drafted the EULA and could have provided a more specific definition or examples of what constitutes "consequential damages" in this context, a court might interpret the term more narrowly against the company, potentially allowing the user's claim for lost work time.
• Commercial Service Contract: A small business hires a web design firm to create a new website. The contract, drafted by the web design firm, states that the firm will provide "ongoing maintenance and support." After the website launches, the business requests a minor update to a product description, but the firm charges an additional fee, arguing that "ongoing maintenance and support" only covers technical issues, not content updates.
  Application of contra proferentem: The phrase "ongoing maintenance and support" is open to interpretation. Does it encompass minor content updates, or is it strictly limited to technical upkeep like server stability and bug fixes? As the web design firm drafted the contract, they had the opportunity to clearly define the scope of "maintenance and support," perhaps by listing included and excluded services. If they failed to do so, a court applying contra proferentem would likely interpret the phrase broadly in favor of the business, requiring the firm to perform minor content updates without additional charge.