Can the writer of a contract attempt to trick the signer using defined terms? Is such a contract binding or void, and can the writer get into trouble for doing so (eg. for misrepresentation)? Two types of scenarios that I want to ask about:

  1. When a defined term in the contract carry a much narrower, or much broader meaning than the common meaning. For example, can a contract define a term "Image" (as in a picture) to mean any computer file, or to mean any image showing a red flower?
  2. When the defined meaning is completely incompatible with the common sense meaning. For example, can a contract define an "Text file" as a file with the .png extension?

Does the answer change if the defined term, when used normally, starts with a capital letter (eg. if "SVG file" is defined as a .png file), so the reader is less likely to suspect the term has been defined in the contract itself?

Does the answer change if this happened in another legal document, such as a EULA, where the person agreeing does not have a chance to call the writer of the document out?

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    That might depend on the country and context. Looking at your example, e.g. in Germany, at least as far as consumers are concerned the EULA is legally part of the general Terms Of Service, and consumers are protected against "überraschende Klauseln", i.e. "surprising clauses" (not sure, but it's probably different for B2B, since business people are supposed to have legal counsel to help them make sense from dense legalese). Of course you might need a court to determine if a clause was indeed surprising. I guess what I mean to say is, you should specify a country. – Eike Pierstorff May 23 '20 at 11:00
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    Might bring in the question of "good faith" if you can show there was clear one party intended to misdirect the other? – TheFiddlerWins May 23 '20 at 16:30
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    It's worth noting that files with the extension .png certainly can be text files. The extension is merely a courtesy indicator to either the operating system or the user on how the data in the file should be read. There's nothing preventing me from renaming hello.txt to hello.png with the same contents. And there's nothing preventing you from opening up any file in a basic text editor, regardless of its extension. Whether that file has a human-readable meaning when opened in a text editor is a different matter, one which still has nothing to do with the file extension. – probably_someone May 23 '20 at 22:54
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    I would suggest that instead of using the current example, you say instead: "Can a contract define a "text file" as a file whose data conforms to the JPEG File Interchange Format"? That way, it's clear that we really are talking about a file that wasn't meant to be human-readable in a text editor, whose data corresponds to a particular encoding of an image. – probably_someone May 23 '20 at 23:00

Is it legal to redefine a term against common sense in a contract?

Generally speaking, yes. What matters is that the contract be clear enough for the parties to be aware of the terms and conditions to which they are committing. Both of the scenarios you outline seem lawful. They are binding to the extent that the definitions & language therein duly inform the parties of the substance of the contract. Definitions in a contract are most pertinent where the meaning of a term is intended to supersede and replace the commonplace meaning thereof.

A contract would become null and void if the substance of that contract contravenes legislation. If legislation outlaws not only the effect of a clause but also its meaning, then the [un-]lawfulness of that clause is not altered simply by crafting definitions of terms. In other words, laws or legislative intent cannot be elluded by relabeling concepts in a contract.

Whenever lawful, the attempt to trick a party with tactics (such as the use of uppercase you mention) is likely to be voidable by that party. The rationale is the same: The draftsman's attempt to confuse the user contravenes the contract law tenet that the parties knowingly enter the contract at issue.

Notice that in the preceding paragraph I wrote "whenever lawful" rather than "although lawful". The reason for that choice is that, in some contexts, the draftsman's tricky attempts might constitute a deceptive practice and thus be in violation of the law (for instance, consumer protection laws).

  • Can the writer be accused of misrepresentation? – Max Xiong May 22 '20 at 19:14
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    @MaxXiong "Can the writer be accused of misrepresentation?" It largely depends on the details. Misrepresentation connotes falsehood and might be unrelated to how terms are defined in a contract. If a counterparty is provided with an odd but concise definition of a term in the contract, the draftsman is complying with the aforementioned tenet of contract law. – Iñaki Viggers May 22 '20 at 19:31

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