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Supreme Court of Ukraine on the interpretation of treaties on the basis of contra proferentem

The Ukrainian Supreme Court “remembered” about the “contra proferentem” principle! By the decision in case No. 756/1381/17-c of 03/25/2020, he consolidated the legal conclusion based on this doctrine.

It reads: “If the interpretation of the content of a written agreement by means of general methods is impossible, the contra proferentem interpretation is used – the words are interpreted against the one who fixed them in it!”

The primary reason for the formation of this conclusion was the claim of the residents of the cottage town against the management organization that provides them with security services on the territory of the “robbed” residential complex.

The tenants in court demanded the recovery of damage caused by improper fulfillment of contractual obligations that led to the theft of property (they stole the ATV of one tenant, parked on the territory of the cottage complex).

The court of first instance dismissed the claim for reimbursement of the cost of the stolen object. The plaintiff was pointed out that the obligation of the management company to monitor the safety of the personal property of each tenant was not spelled out in the controversial agreement!

“The court of first instance mistakenly decided that even the obligations clearly spelled out in the contract do not guarantee that if one of the parties fails to fulfill its obligation, the other will receive compensation if they cannot be interpreted unambiguously!”

The appeal court took the side of the plaintiff! It was decided that the obligation of the defendant, prescribed in the contract, to ensure the protection of the territory and the safety of property objects located on it, affects the situation with the ATV, which was stolen from the territory, and not from the owner’s land plot.

The defendant appealed to the Supreme Court of Ukraine, motivating his complaint by the fact that the appellate instance incorrectly qualified the contract, the drafting of which did not provide for the obligation to preserve the property of the plaintiff!

The cassation court upheld the decision of the appeal and in the ruling on case No. 756/1381/17-c of 25.03.2020 stated the following:

  1. If it is not possible to establish the unambiguous meaning of any condition of the agreement with a toolkit of general legal approaches, then the interpretation of the substantive essence of transactions governed by parts 3, 4 of Art. 213 of the Civil Code, is implemented with the help of a contra proferentem interpretation (the terms of the transaction are interpreted against the one who enshrined them in the contract).
  2. In the situation under consideration, the stolen thing was at the time of theft in the common area, which, under a service contract, the company undertook to protect. The obligation has not been fulfilled, therefore, the person who has not fulfilled it is responsible, in the analyzed situation – reimburses the cost of the ATV!

05.05.2020

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