contra proferentem rule

contra proferentem rule

a rule of interpretation that demands that the words to be construed should be construed against the party seeking to utilize them. Thus, in the law of contract an exemption clause is construed against the party founding on it, as are contracts in restraint of trade.
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would have served to upend the contra proferentem rule in favor of the
explaining that the contra proferentem rule requires
The future of class-action waivers in consumer contract arbitration agreements after DIRECTV, Inc. v. Imburgia
Iowa 1997) ("rules of statutory interpretation, rather than the contra proferentem rule, ought to apply when the terms of an insurance contract are dictated by statute, because, in such circumstances, the real question is or ought to be the intent of the legislature, not the intent of the parties to a contract in which neither has any real say as to the terms of the agreement").
A "principled" approach to coverage? The American Law Institute and its Principles of the Law of Liability Insurance
The judge also held that the contra proferentem rule should generally apply in a 'take it or leave it' situation where one party is effectively unable to influence the drafting of the terms of the agreement.
The judge said that the contra proferentem rule was not to be used save as a last resort.
Legal and Regulatory Update
This principle squares with the contra proferentem rule, and the principle that courts should interpret coverage provisions broadly, while they should narrowly read exclusion clauses.
Ontario Court of Appeal rules that, as distinguished from duty to indemnify, duty of Canadian insurer to defend insured in U.S. trademark litigation against insured turns primarily on allegations in plaintiff's U.S. complaint rather than on its underlying facts
More than 25 years ago, Samuel Williston in A Treatise on the Law of Contracts, citing a raft of decisions extending decades back, noted that the "well-established" and "inviolate" contra proferentem rule had been "repeated in the decided cases with almost monotonous regularity.
Whether or not the contra proferentem rule is applied in any particular insurance coverage dispute is critical because it may determine the outcome of the dispute.
Despite the strength and widespread application of the contra proferentem rule, some courts have declined to follow it in cases in which policyholders were large companies and sophisticated in their insurance knowledge.
In the past, other courts similarly have rejected application of the contra proferentem rule when the policyholder has been a large, sophisticated entity with perceived bargaining power or insurance expertise.
Should the more sophisticated get less insurance coverage?

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