Construing the Contract Against the Drafter
By: Brad Lambert
Most people are familiar with the legal rule that requires interpreting the contract against the drafter. Generally speaking, when applied this rule requires that any ambiguity or other contract terms which are subject to multiple reasonable interpretations will be given the interpretation which works against the party who drafted the document.
This rule is all but built into our DNA when we contemplate entering into a contract. Some people may indeed enter into a contract under the belief that any nasty clauses will be construed against the party imposing those clauses. Nonetheless, any expectation we may have that our reading of the contract will be “saved” by this rule should be minimized, because the rules in Michigan militate against that result. Michigan courts have consistently declared that this rule is only to be applied if all conventional means of contract interpretation, including the consideration of relevant extrinsic evidence, have left the jury unable to determine what the parties intended their contract to mean. Klapp v. United Insurance Group Agency, Inc., 468 Mich. 459, 471; 663 N.W.2d 447 (2003).
In other words, this is a rule of last resort, and it really isn’t even a rule of interpretation at all. Rather, it is a rule of “legal effect” which imposes an interpretation on a party when all other legal means of interpreting the contract fail
In contract law, it takes a long time to reach that “last resort.” The Court or fact finder must first agree that the clause is ambiguous, difficult to discern, or subject to multiple interpretations. Courts are inclined to use every measure available to reconcile the allegedly conflicting or ambiguous clauses with the rest of the contract. The party relying upon construing the contract against the drafter runs the risk that the Courts will find a way to reconcile the contract clauses.
If this formidable hurdle is overcome, the courts will first turn to a host of rules pertaining to contract interpretation which can fill up entire chapters in legal texts. For example, if the parties have previously performed under the contract, or made statements regarding the meaning of the contract, those statements or actions may be used to decide any conflicts in the contract interpretations offered by the parties. There are many other rules too numerous to cite here.
On top of all that, in this author’s experience, it is becoming increasingly common for parties to insert clauses in the “miscellaneous” or “general” sections of their contracts stating words to this effect: “both parties participated in the drafting of this agreement and no presumption or burden of proof shall arise favoring or disfavoring any Party hereto by virtue of the authorship of any of the provisions of this Agreement.” Such clauses make it that much more difficult to prevail in any subsequent argument that a contract clause should be construed against one party or the other.
The moral of the story is this: don’t place undue reliance on the rule that “a contract is construed against the drafter.” You should seek legal advice, most notably from this office, before resting your legal case on any hope that your desired rendition of your contract will prevail based upon that legal maxim.
Caution: This article provides general information and is not intended to be legal advice. Your personal circumstances likely vary from those discussed in this article. You should contact Lambert Law if you are seeking specific legal advice as to your contract or circumstances.
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