The Principle contra proferentem in Standard Form Contracts. In particular, the Spanish Case.

Pablo Salvador Coderch; Juan Antonio Ruiz Garcia

doi:10.2202/1535-167X.1028

There are clearly identifiable steps in the interpretation of contracts. First, the parties’ common intention (that which they wanted to regulate) is sought; next, an attempt is made to build up a picture of the relevant conditions, whether they be common or legally required (those which, given the circumstances, the parties would have wished to establish, on either rational or legal grounds); finally, the judge may end up applying legal provisions far removed from the parties’ ex ante common will, such as the contra proferentem rule, whose purpose is to prevent the use of unintelligible terms through the threat of applying, in each such case, an interpretation in favour, not of whoever is responsible for creating such unintelligibility, but of the other party. In this sense, the principle contra proferentem is a penalty default rule: faced with an unintelligible term, the doubt is resolved in the consumer’s favour rather than a decision being based on the most likely common will. The rule is thus clearly one of default and is applied if, and only if, there is no particular condition that provides for the issue at stake; but it is also a rule which penalizes the seller or supplier’s use of unintelligible standard form terms and conditions as any doubts are always resolved against him and in favour of the consumer. It leads to an outcome that is clearly opposed to what the term’s author would have wanted and thus acts as an incentive to word terms in a clear way i.e. to reveal information to both the other party and the Courts. These kinds of rules are particularly indicated when it is more reasonable to allocate the burden of clear expression to whoever can best bear it ex ante, i.e. at the time of concluding the contract. In the case of standard form contracts this is usually the seller or supplier rather than the consumer or, especially, the Court who will have to interpret the contract and decide ex post what the term means. The courts, which offer legal protection at a political – subsidized – price provide incentives to establish clear contractual regulations, a penalty default being applied to those who fail to do so.

The Principle contra proferentem in Standard Form Contracts. In particular, the Spanish Case.

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