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Home / News and Insights / News / Clearly unclear and ambiguously unambiguous. What happens when a contractual term is unclear?

A recent decision in the Persimmon Homes Limited v Ove Arup case has continued to move away from the traditional contra proferentem rule which provides that any unclear words in a contract would be construed against the person who put them forward.

The general notion of the judgment is that the contra proferentem position does not go any further to deciding what those terms in question actually meant and, instead, only seem to punish the party who put them forward with little reason as to why.

The Court of Appeal has reaffirmed a decision from 2011 that commercial sense should be enough to consider the actual meaning of the contractual provision, particularly in a commercial situation where the parties have equal bargaining power. In an employment context, an equal bargaining position is not often the case with the employer having more bargaining power than the employee.

The best way to avoid any issue of not being able to rely on your own drafting is to make contractual provisions as simple and clear as possible. However, where that has not happened and confusion arises, an employer may find their argument of ambiguity being held against them despite this recent decision.

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