Agreement Not Construed Against Drafter

The rationale for this rule is to encourage the author of a treaty to be as clear and explicit as possible and to take into account as many predictable situations as possible. Eric Posner stated that “the counter-proferentem rule could, for example, encourage the author to be more explicit and to give more details about the commitments. This may reduce the likelihood that the other party will be dissatisfied with the contract; it can also facilitate judicial interpretation of the treaty. [5] Uri Weiss stated: “The counter-proferentem rule encourages the less reluctant policyholder to risk not manipulating the other party by rendering the contract obscure. Both parties can thus agree that the less risky party formulates the contract and thus reduces the cost of the transaction. Without this rule, there could be a moral hazard problem. [6] This rule is almost embedded in our DNA when we consider entering into a contract. Some people may indeed enter into a contract, convinced that all the evil clauses are interpreted against the party that imposes these clauses. Nevertheless, any expectation that our reading of the treaty will be “saved” by this rule should be minimized, as Michigan rules oppose this result. The Michigan courts have always stated that this rule would only apply if all conventional means of interpretation of the contract, including consideration of the relevant extrinsic evidence, were not in a position to determine what the parties intended to do with their contract. Klapp v. United Insurance Group Agency, Inc., 468 Mich.

459, 471; 663 N.W.2d 447 (2003). Against proferentem (In Latin: “against [the] supplier”), [1] is also known as “interpretation against the author,” is a doctrine of contractual interpretation that provides that if a promise, agreement or term is ambiguous, the preferred meaning should be one that acts against the interests of the party that presented the text. [2] The doctrine is often applied to situations where standardized contracts or where the parties have unequal bargaining power, but apply to other cases. [3] However, the doctrine does not apply directly to situations in which the language in question is prescribed by law, as is often the case with insurance contracts and bills of lading. [4] The Latin term contra proferentem is a treaty principle that provides that an ambiguous or uncertain term is interpreted in a contract against the party causing the uncertainty. Civ. Code 1654. Ambiguities are a contractual language that is difficult to understand or distinguish. Royal Neckwear Co. v. Century City, Inc., 205 Cal.App.3d 1146, 1153 (1988).

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