Contra proferentum

Contra proferentum

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This precedent has been authored by Dr. Gordon Hughes, Principal, Davies Collison Cave Law.

Introductory note

A contract will often expressly disclaim the application of the “contra proferentum rule”. The rule requires that ambiguity in a term of a contract will be resolved against the party who proffered the term for that party’s own benefit, or in other words, the party which included the draft wording in the contract. The rule is problematic, especially where parties are adequately represented in the course of contract negotiations, and arguably it only retains a “limited role” (see Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500; [1986] HCA 82; BC8601387; Persimmon Homes v Ove Arup [2017] PNLR 29) in contract interpretation. Parties commonly include a provision in the contract which expressly disclaims the operation of the rule.