But usually, an ambiguous contract means that a specific term, word, phrase, or definition is vague or unclear. If a contract is ambiguous, it can sometimes be resolved by the parties through further discussions . If not, it may be necessary to have the document reviewed in court to have the issues resolved.
How do courts generally rule in cases involving ambiguous contract language?
There is a general rule that a court will construe ambiguous contract terms against the drafter of the agreement. But this rule only applies where one contracting party is in a superior bargaining position , usually either as a result of greater experience or the assistance of counsel.
Are ambiguous contracts enforceable?
Ambiguity in contract law can result in a void or voidable contract, depending on the type of ambiguous language identified in the agreement. A contract might be ambiguous if the language itself , i.e. a specific term, word, or phrase, is reasonably subject to more than one interpretation.
Can contracts be ambiguous?
Unless a court determines the contract is “ambiguous ”, meaning the terms are subject to more than one reasonable interpretation. ... If both sides have reasonable interpretations of the same term, then the contract is ambiguous, and the court may look outside of the contract to interpret the contract’s meaning.
What is the ambiguity rule?
A US legal rule which requires judges to construe ambiguities (expressions that can be given more than one acceptable interpretation) in insurance contracts against the insurer and therefore in favour of the insured.
How do you avoid ambiguity in a contract?
- Keep it simple. Keep your writing simple, clear and concise. ...
- If it’s part of the agreement, include it in the contract. ...
- Define key terms. ...
- Include an order-of-precedence clause. ...
- Make proper use of standard forms.
What happens if a contract is silent on an issue?
Sometimes the parties negotiating a contract omit to address an important issue . Only in certain circumstances can the courts imply a term in the contract to deal with the situation. (5) It must not contradict any express term of the contract. ...
What are the rules of contract interpretation?
There are many rules and regulations governing contract interpretation. Courts should always interpret contract terms with the goal of identifying the intention of the parties. Determining the intent of the parties should be an objective analysis . The court should not consider subjective intentions of the parties.
Who does ambiguity in a contract favor?
What Is the Contra Proferentem Rule? The contra proferentem rule is a legal doctrine in contract law which states that any clause considered to be ambiguous should be interpreted against the interests of the party that created, introduced, or requested that a clause be included .
What is the cardinal rule in the interpretation of contract?
“The cardinal rule for interpretation of contracts is to ascertain the intention of the parties and to give effect to that intention, consistent with legal principles .” Bob Pearsall Motors, Inc. v.
What are examples of ambiguity?
- The bark was painful. (Could mean a tree’s bark was rough or a dog’s bark communicated pain or hurt the listener’s ears).
- You should bring wine or beer and dessert. (Could mean that you must bring just wine, wine and dessert, or beer and dessert).
- Harry isn’t coming to the party.
What are the three types of ambiguity?
Three types of ambiguity are categorised as potential ambiguity: lexical, syntactical, and inflective .
What happens if an insurance policy is ambiguous?
In general, if a policy provision is found to be ambiguous, the policyholder prevails ; if the provision is found to be unambiguous, the insurer prevails.
What kind of contract is missing an element that would make it enforceable?
If one or more or these necessary elements is missing, the contract is void or voidable . In other words, it is not a true contract and therefore cannot be enforced. A void contract is no contract at all.
What does it mean for a contract to be vague or ambiguous What are the risks of vagueness or ambiguity?
A contract can be said to be vague or ambiguous when expectations or deliverables from any or both the parties to the contract is not clearly written. The risk of vagueness or ambiguity is that if there is a dispute between the parties then the contr...
What is the Contra Proferentem rule?
A Latin term used in contract law referring to the principle that a judge will construe an ambiguous term against the party that imposed the inclusion of the term in the contract during negotiation or drafting .
