Legal Maxims2

LEGAL MAXIMS 2
29 May 2024 16:48 Houghton v. Trafalgar Insurance Co. Ltd. (1954)

The case involved an insurance policy that covered damage caused by “collision
or impact” but excluded damage caused when the car was “overloaded.”
The court held that the ambiguity should be interpreted against the insurer, who
CONTRA PROFERENTEM drafted the policy, and in favor of the insured.
The term comes from Latin and means "against the one who puts forth."
The contra proferentem rule is a legal doctrine in contract law that dictates how ambiguous clauses
in a contract should be interpreted. The rule stipulates that if a clause in a contract is ambiguous or
can be interpreted in multiple ways, it should be read in a way that disfavours the party who
originally drafted, introduced, or demanded the inclusion of that specific clause.
Therefore, there are 3 major components to the contra proferentem rule-
1. Ambiguity- there exists ambiguity in the contract, or multiple interpretations can be drawn
from the contract reasonably
2. Drafting Responsibility- The maxim assumes the responsibility of the drafter in preventing
ambiguity. So, the drafter had an opportunity to clarify the terms and conditions of the
contract.
3. Disfavouring the drafter- The ambiguous term will be interpreted against the interests of the
drafter.
It serves as protection against the potential misuse of contract language. It's often applied in
contract disputes involving insurance companies that have refused to pay claims. So it prevents any
compromise of the interests of the person who did not draft the contract in the first place.
Example-
Say a rental agreement drafted by the landlord says- Pets are allowed in the apartment but no large
pets will be allowed.
Here, the landlord has left the term large pets unclarified. What classifies as a large pet? Does it
refer to height, or weight or some other factor?
So, say the landlord notices a dog and insists that the dog is a "large pet" and should not be allowed
in the apartment. The tenant argues that their dog is not a "large pet" and falls within acceptable
limits.
If the dispute goes to court, the principle of contra proferentem would come into play. Since the
landlord drafted the agreement and created the ambiguous term "large pets," the court would likely
interpret the term in favour of the tenant.
DELEGATUS NON POTEST DELEGARE

Latin legal maxim that means "a delegate cannot further delegate."
It is a principle that ensures that authority or responsibility given to a specific individual or body
cannot be transferred to another without explicit permission.
The rationale behind the maxim is based on the premise that when authority is delegated to a
person, it is because the delegator trusts the delegate's specific skills, judgment, and capabilities. So,
if the original delegator intended for the authority to be exercised by a specific person or body, it
should not be further delegated to someone else who may not have the same qualifications or trust.
Example-
John, a small company owner has a busy schedule. Due to this, he decides to delegate the task of
managing the employees' and workers' payments to Mary, an experienced and qualified accountant.
Now, Mary takes up this task, however, she finds this task overburdening and thus, decides to
delegate it further to Jim, a junior accountant.
Jim makes errors in the task, by overpaying some employees and underpaying some others. The
issue is then brought up to John.
Here, the principle of delegatus non potest delegare comes up where John had specifically delegated
the responsibility of paying the employees correctly to Mary alone. John’s trust and reliance were on
Mary’s skills, not on Jim’s. The decision to delegate such an important task was based on Mary’s
qualifications and not on the junior accountant’s capabilities.
However, since she overstepped her authority by delegating a task further, which she was not
entitled to delegate, she shall be responsible for the issue.
Toole v. A-G: a local authority had delegated its decision-making
EX NUDO PACTO NON ORITUR powers concerning housing allocations to a subcommittee without
ACTIO
proper authorization The subcommittee's decisions were declared
invalid.
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EX NUDO PACTO NON ORITUR ACTIO
Latin legal maxim that translates to "no legal action arises out of a bare promise"
The maxim is used in cases where there's an agreement which lacks consideration. In such cases,
agreements are not enforceable in court and are void.
In contract law, consideration is something of value that is exchanged between the parties involved.
It can be money, goods, services, or a promise to do or refrain from doing something. Consideration
is essential for a contract to be legally binding.
Courts will not enforce agreements that lack consideration because they do not see them as creating
any binding obligation between the parties.
Example-
Sarah says, "Mike, I promise to give you my old laptop next week."
Mike does not offer any money, service, or other benefit in exchange for the laptop. It is a purely
gratuitous promise from Sarah.
The following week, Sarah changes her mind and decides not to give Mike the laptop. Mike is upset
and wants to enforce Sarah's promise.
Application of the maxim- here, the promise made by Sarah to Mike was a purely gratuitous one and
Mike did not promise to do something, or abstain from doing something, or provide something in
return to Sarah for the laptop. Therefore this is an agreement without consideration, a bare pact
(nudum pactum). Thus, this agreement lacks an essential component for formation of a contract-
consideration. This agreement therefore, is not enforceable in court and no action can be brought
against Sarah by the principle of ex nudum pactum non oritur actio.
CASE LAW
Re McArdle- A woman carried out improvements to a house owned by her husband's family. After the work
was done, the family members signed a document promising to reimburse her for the expenses.
Issue: Whether the promise to pay was supported by valid consideration.
Ruling: The court held that since the work had already been completed before the promise was made,
there was no valid consideration. The promise was therefore unenforceable.
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LEGAL MAXIMS 2

29 May 2024 16:48 Houghton v. Trafalgar Insurance Co. Ltd. (1954)

DELEGATUS NON POTEST DELEGARE

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