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Contra proferentem

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Understanding Insurance Policies As Noncontracts: An Alternative Approach To Drafting And Construing These Unique Financial Instruments, Christopher French Dec 2016

Understanding Insurance Policies As Noncontracts: An Alternative Approach To Drafting And Construing These Unique Financial Instruments, Christopher French

Christopher C. French

Insurance policies commonly are understood to be a species of standardized contracts. This Article challenges that conventional wisdom and argues that insurance policies do not actually qualify as contracts under the doctrinal and theoretical bases of contract formation. It examines the process by which insurance policies are created and sold, and measures that process against the requirements for contract formation. This Article also distinguishes insurance policies from other types of standardized contracts, such as wrap agreements, which currently are the subject of much litigation and scholarly commentary. It then explores the doctrinal and theoretical bases underlying the specialized rules that …

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Insurance Policies: The Grandparents Of Contractual Black Holes, Christopher French Dec 2016

Insurance Policies: The Grandparents Of Contractual Black Holes, Christopher French

Christopher C. French

In their recent article, The Black Hole Problem in Commercial Boilerplate, Professors Stephen Choi, Mitu Gulati, and Robert Scott identify a phenomenon found in standardized contracts they describe as “contractual black holes.” The concept of black holes comes from theoretical physics. Under the original hypothesis, the gravitational pull of a black hole is so strong that once light or information is pulled past an event horizon into a black hole, it cannot escape. In recent years, the theory has been reformulated and now the hypothesis is that some information can escape, but it is so degraded that it is virtually …

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Policy Considerations In Contract Interpretation: The Contra Proferentem Rule From A Comparative Law And Economics Perspective, Péter Cserne Sep 2009

Policy Considerations In Contract Interpretation: The Contra Proferentem Rule From A Comparative Law And Economics Perspective, Péter Cserne

Péter Cserne

Deviations from the common intentions of the parties in contract interpretation is sometimes attributed to “an appetite for benefiting whichever of the parties is perceived to be in a weaker bargaining position”. In this paper I argue that there is more reasonable explanation (justification) for at least some of these deviations. The contra proferentem doctrine is an information-forcing rule that can promote optimal completeness and clarity in contracts. Whether the contract is standardized or not, other things being the same, the risk of ambiguity in contractual language should be borne by the party who could more cheaply avoid it, and …

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