Question: 1 / 285

How are issues of ambiguity usually resolved in contracts of adhesion?

In favor of the insurer

By mutual consent

In favor of the insured

In contracts of adhesion, which are typically standard form contracts where one party has significantly more power than the other, issues of ambiguity are usually resolved in favor of the insured. The rationale behind this principle is that the insured is often considered to be at a disadvantage, as they do not have the opportunity to negotiate the terms of the policy. Consequently, when a provision in the contract is ambiguous or unclear, courts tend to interpret the terms in a manner that benefits the party with less bargaining power, which reinforces consumer protection.

This approach is rooted in the legal doctrine of "contra proferentem," which means that any unclear language is construed against the party that drafted the document. In the context of insurance, this means that if there are two reasonable interpretations of a term or clause within the policy, the one that favors the insured will typically be upheld. This principle encourages insurers to draft clear and precise contract language, as they cannot rely on ambiguity to protect their interests.

Get further explanation with Examzify DeepDiveBeta

By arbitration

Next

Report this question

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy