For businesses involved in a construction project, the contracts they enter into are crucial in allocating risk, setting out the parties’ rights and obligations, and providing a framework for resolving disagreements. Unfortunately, contractual terms are not always clear, due to issues such as ambiguous wording or poorly defined responsibilities. When this happens, courts, adjudicators, and specialist construction lawyers like those at Altion Law apply legal principles to interpret the contract. One of the most important of these principles is the ‘contra proferentem rule.’
If you need help and advice on any type of construction dispute, our leading team of construction solicitors and barristers is ideally placed to assist. We are a decidedly commercial firm, focused on providing pragmatic advice in plain English and at highly competitive rates.
For a confidential free discussion, call us today on 01908 414990, alternatively email us at Hello@altion-law.co.uk or complete our Free Enquiry Form and we will call you back.
What is the Contra Proferentem rule?
The Latin phrase contra proferentem literally means “against the offeror”. In legal terms, this means that where a contractual clause is ambiguous, it will be interpreted against the party who drafted it.
The rationale behind the contra proferentem rule is simple: the party that drafted the clause had the power to clarify the wording and ensure that it was clear. If they failed to do so, they should bear the risk of any ambiguity. This prevents parties from hiding behind deliberately vague language and ensures fairness in contractual relationships.
Do the courts always apply the Contra Proferentem rule?
It is important to note that the contra proferentem rule is a principle of last resort. The court’s main concern will always be to seek to interpret the contract objectively, taking account of the words used, the surrounding circumstances, and applying commercial common sense. Contra proferentem is applied cautiously, and only if genuine ambiguity remains.
Some examples of the other factors the courts will consider when interpreting an ambiguous contractual term include the following:
- Commercial context. The courts generally seek to interpret a contract in a manner that makes commercial sense.
- How sophisticated the contracting parties are. In contracts between experienced businesses, especially when both parties took legal advice before entering into the contract, the courts may be less inclined to apply the contra proferentem rule.
- Is the term actually ambiguous? The contra proferentem rule is only relevant if the contract is genuinely unclear. If the drafting is clear, the rule is not applicable. It cannot be used to simply rewrite unfavourable terms.
How does the Contra Proferentem rule apply to Construction Disputes?
Contractors in the construction industry often seek to rely on the contra proferentem rule to argue that any ambiguities in a standard form construction contract should be resolved in their favour. While this argument may stand in some cases, the nature of the relationship between the parties may be such that the courts decline to apply the contra proferentem rule when interpreting clauses in construction contracts. Some reasons for them doing so include the following:
- The parties involved in construction projects are often sophisticated businesses that have taken legal advice on their contractual arrangements, and whose solicitors negotiated the contract on their behalf. As we have explained above, where both parties took legal advice prior to entering into the contract, the courts are often less inclined to apply the contra proferentem rule.
- The courts seek to view a contract in its commercial context. Where possible, a judge will interpret a contract so that it makes sense commercially.
- The contra proferentem rule, while powerful, is a last resort, and the court will generally only use it where all other attempts to interpret the contract have failed.
How Altion Law Can Help
Whether the contra proferentem rule will be applied in any given case depends on the circumstances. Our specialist solicitors will review the terms of your contract and consider your commercial reality to assess the likelihood of the court using it to interpret the clause in dispute.
At Altion Law, we specialise in resolving disputes between parties in the construction industry and advising on complex contractual issues. Our team regularly assists clients with disputes involving unclear payment provisions, defective works, professional negligence, and all other types of construction disputes. We have a deep understanding of technical legal issues, such as the contra proferentem rule, and we understand how they are applied in practice. We use this expertise to strengthen our clients’ positions and build the most robust case possible on their behalf.
Whether you are negotiating a new construction contract or facing a dispute over an existing one, seeking advice from our experienced team will ensure that ambiguous clauses are interpreted fairly and that your commercial interests are protected.
For a confidential free discussion, call us today on 01908 414990, alternatively email us at Hello@altion-law.co.uk or complete our Free Enquiry Form and we will call you back.
