Lexical ambiguity arises when the context is insufficient to allow readers to determine the sense of a word that has more than one meaning. You’d think that to avoid lexical ambiguity, all that a drafter has to do is ensure that reasonable readers couldn’t find alternative meanings in a given word. But for two reasons, that’s not enough.
For one thing, anyone drafting a given contract should be concerned with not just reasonable readers, but also one particular group of potentially unreasonable readers, namely those associated with the other side in the transaction. If a contract party is dissatisfied with how a given deal has worked out and either the stakes are high enough or their feelings have been hurt somehow, they may react unreasonably. In particular, they may be willing to argue that a word is ambiguous, even though your average reader would be inclined to disagree.
So you should do your best to preclude the possibility that the other side might make a halfway plausible argument regarding the meaning of a given word—winning a dispute is a distant second to avoiding the dispute in the first place. That requires some imagination, in that you have to put yourself in the other guy’s shoes. But note that I said “halfway plausible”—you can’t be expected to take preemptive measures against arguments that are outright loopy.
Another shortcoming to having a narrow approach to avoiding lexical ambiguity is that even if reasonable readers wouldn’t regard a given word as ambiguous, the other side might come to feel that it’s the wrong word—that it doesn’t reflect the deal, or at least what the deal should have been. If that’s the case, they may be inclined to put up a fight and claim, however implausibly, that the word is ambiguous.
I thought of this in connection with a recent opinion of the Ninth Circuit Court of Appeals. (This case involved legislation, but for my purposes it applies equally to contracts.) The court found that the defendant hadn’t violated a federal environmental statute when he left bottles of water for illegal immigrants in an Arizona wildlife preserve. The court found that bottles of water didn’t meet the definition of waste under the statute, which prohibits the dumping of garbage in an area designated as a refuge for endangered species. (Click here for the WSJ Law Blog’s account, which contains a link to the opinion.)
I think it’s inconceivable that the bottles of water could be considered waste. But I also suspect that the drafters would have done well to prohibit not only dumping garbage but also depositing anything else, no matter what the intent. In prosecuting this defendant, the authorities may have been motivated by what the statute should have said as much as by what it actually says. The fact that a dissenting judge was willing to accept this argument shows that it wasn’t entirely futile.
So when it comes to word choice, making an extra effort to avoid ambiguity isn’t quite enough. You’d also want to make sure that the word fits, taking into account whatever contingencies you can think of, with a bit of imagination.
