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This question is a follow up to If a party says something about interpretation of contract, is it binding? Since courts usually interpret an ambiguous term in the favor of the party that did not draft it, why would the non-drafting party want clarification? If the party that didn't draft the term gets the benefit of the doubt, wouldn't it make more sense for him not to point out any ambiguities and to not ask clarifying questions before agreeing?

Am I looking at this right?

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Because disputes are expensive, time-consuming and generally not fun

An ambiguous term is a dispute waiting to happen. Far better to resolve the ambiguity and correctly allocate (and price) the risk at the start of a contract when nothing is at stake then have that term be at the centre of a dispute with $10 million on the table that both parties think is theirs.

At best, a dispute strains the relationship, at worst, it involves time and costs putting the matter before an arbitrator or a judge and hope the resolve the ambiguity your way. I prefer to play roulette at a casino not a courtroom.

Contra preferentum is unlikely to be a successful argument in any form of non-determinative dispute resolution - essentially the proffering party is never going to agree that it applies.

Further, contra preferentum is a last-resort resolution mechanism. Maybe what you read as ambiguous is actually clear. Or clear in context, or clear when industry norms are considered or when past dealing or current dealings between the parties are considered. Relying on it is a real long shot.

Also, almost all B2B contracts explicitly exclude contra preferentum as a method of resolving ambiguous terms.

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  • This is a solid answer. For a slightly different narrative (but ultimately the same result) on the B2B part, specifically regarding exclusion clauses in risk allocation, this may be worth a read: ashurst.com/en/news-and-insights/legal-updates/… – A.fm. Nov 12 '19 at 0:21
  • The mere act of explicitly excluding contra proferentem in a B2B contract does not render such clause enforceable. Contra proferentem is about public policy in contexts of uneven bargaining power, and it is obvious that not all businesses entering a contract have comparable bargaining power. – Iñaki Viggers Nov 12 '19 at 11:42
  • @IñakiViggers it’s also well established public olive that people should be free to contract as they wish – Dale M Nov 13 '19 at 1:48
  • "people should be free to contract as they wish". I agree, but there are rights and protections which cannot be waived by contract. In particular, the protection inherent in contra proferentem helps a court remedy its inability to ascertain the intent of the clause from which a controversy arises. – Iñaki Viggers Nov 13 '19 at 11:12
  • @IñakiViggers there are protections that can’t be waived. Contra preferentum isn’t one of those - it can be waived. – Dale M Nov 13 '19 at 11:20
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Given the doctrine of Contra proferentem wouldn't it be better for the non-drafting party to not point out ambiguity?

Not necessarily. One of the reasons has to do with avoiding litigation and the uncertainty of its outcome, as pointed out in the other answer.

Another reason is that the parties' intent with respect to a disputed clause might be ascertained from the contract altogether and/or from the parties' conduct. See Lamps Plus, Inc. v. Varela, 139 S.Ct. 1407, 1417 (2019) ("contra proferentem is by definition triggered only after a court determines that it cannot discern the intent of the parties".) Consequently, it would be a mistake for the non-drafter to automatically view isolated ambiguities as a wildcard if a contract dispute arises.

As for B2B contracts excluding contra proferentem (see the other answer), the reason of being of contra proferentem is to compensate for differences in bargaining power. Accordingly, Lamps at 1417 states that "contra proferentem provides a default rule based on public policy considerations". Being public policy, clauses which explicitly exclude it are void and unenforceable in scenarios where the parties' bargaining power is uneven. This applies regardless of whether or not the parties to a contract are businesses.

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