6.   Contra Proferentem Rule – this rule is generally applied to interpret standard form contracts if the words, phrases or sentences in a policy are vague or ambiguous, they should be interpreted, contra-proferentes i.e. restrictively against the party relying on them. It has been observed that’

It is a well known principle of insurance law that if the language of a warranty in a policy is ambiguous it must be construed against the underwriter who has drawn the policy and has inserted the warranty for his own protection
Houghton Vs Trafalgar Insurance Co. Ltd
[1953] Lloyds Rep. 503, [1953] 2 ALL ER 1409, [1953] 3 WLR 985 or [1954] 1 QB 247

A motor insurance cover not excluded “loss, damage and or liability caused or arising whilst the car is conveying any load in excess of that for which it was constructed”. The vehicle was carrying a driver and 5 passengers. The insurer contended that it was not liable in that the car was conveying a load “in excess of that which it was constructed.” It was held that the company was liable. In the words of Somervell LJ,

If there is any ambiguity, it is the company’s clause and the ambiguity would be resolved in favor of the assured

a)    English Vs Western
[1942] KB
Where a policy contains conflicting words; phrases or sentences, the court must reconcile them so as to give the policy a positive legal meaning. Where the conflicts re irreconcilable then written words if any must prevail over printed ones. This is illustrated by;

b)   Yorkshire Insurance Co. Vs Campbell
[1917] AC 218.
Express terms override implied terms with which it is inconsistent. Where all terms are printed, the latter terms are given more effect than the former as they may have been intended to qualify the former. Where contractual terms are written, the general rule, parole evidence is inadmissible to vary, change or explain such terms. However, such evidence may be admissible to show the circumstances in which the contract was entered into or demonstrate that the contract was subject to a particular trade usage or custom.

c)    Robertson Vs French
[1803] 4 East 130
Where there is conflict between the printed and written clauses of a policy, greater consideration will be paid to the written clauses.

Lord Ellen borough CJ at pg 136 said’

The only difference between policies of insurance, and other instruments in this respect, is, that the greater part of the printed instruments of them, being invariable and uniform, has acquired from use and practice a known and definite meaning, and that the words superadded in writing [subject indeed always to be governed in point of construction by the language and terms with which they are accompanied) are entitled nevertheless, if there should be any reasonable doubt upon the sense and meaning of the whole, to have a greater effect attributed  to them than to the printed words, in as much as the written words are the immediate language and terms selected by the parties themselves for the expression of their meaning, and the printed words are a general formula adapted equally to their case and that of all other contracting parties upon similar occasions and subjects.”


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