A New Taxonomy of Vagueness in Contracts

This contains my first attempt at expressing something I’ve been mulling over for a while—the notion of “floating vagueness.” I’m prepared for it to end up in the dustbin. [Updated 25 June 2016: Hey guess what, it did end up in the dustbin! I found a way to express more simply the concepts I was groping for. My revised analysis will appear soon in an article. Don’t bother reading this post.]

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One source of uncertain meaning in contracts is vagueness. With vagueness, whether a given standard is met is a function of the circumstances. For example, the word promptly is vague. How fast a contract party has to act to comply with an obligation to do something promptly is a function of what would be reasonable under the circumstances. There’s no specific deadline.

It follows that with vagueness comes the possibility of dispute. A contract party under an obligation to do something promptly might act fast enough that no one could reasonably say that they hadn’t acted promptly. But the longer they take, the greater the likelihood of the other party’s deciding that they hadn’t acted promptly.

That being the case, it would seem sensible to be specific instead of vague. Saying, for example, no later than five days after instead of promptly after allows you to avoid the possibility of dispute.

But drafters use vagueness whenever lack of control (over the future, over someone else’s conduct) renders precise standards unworkable. For example, if a provision requiring reimbursement of legal expenses might apply to a broad range of litigation, from the trivial to the catastrophic, it might make sense to express a cap not as a specific amount but instead by referring to reasonable legal expenses.

Vagueness can also be expedient if addressing an issue precisely would make negotiations longer or more contentions than one or both parties want.

Reasonable-Person Vagueness Versus Floating Vagueness

One can discern two kinds of vagueness. There’s vagueness associated with the adjectives reasonable, prompt, material, negligent, satisfactory and workmanlike (among others) and any related adverbs. Vagueness using such words is assessed using a reasonable-person standard. That’s self-evident in the case of reasonable and reasonably; in the case of the other words, it’s a function of caselaw.

But other vague words appear not to require a reasonable-person standard. For example, the adjectives fast, similar, substantial, tall, extreme, and the related adverbs.

Determining whether, for example, someone is tall necessarily involves considering the circumstances, namely whether you’re dealing with a group of preschool children or a group of basketball players. But beyond that, it’s not clear what the basis would be for determining the minimum height for being tall.

Similarly, where on the spectrum from “nothing” to “all” does the word substantial fall? Who knows. (The phrase substantially all is anchored at the “all” end of the spectrum, which reduces the scope for dispute, although the question what substantially all means nevertheless fuels its fair share of litigation.)

To distinguish this kind of vagueness from vagueness assessed using a reasonable-person standard, I propose referring to it as “floating vagueness.” Words associated with reasonable-person vagueness express established legal standards that you either meet or don’t meet. By contrast, words associated with floating vagueness express other attributes that don’t have those legal connotations, so they don’t have a reasonableness standard attached.

Whether a standard based on reasonable-person vagueness has been met might be far from clear cut— reasonable-person vagueness fuels plenty of litigation. But floating vagueness incorporates an extra measure of uncertainty. So use reasonable-person vagueness only when being precise doesn’t make sense or exacts too great a negotiation cost, and try not to use floating vagueness at all.

Gradations of Vagueness

The notion of gradations in vagueness is an unhelpful one.

It’s on display in use of negligent and grossly negligent. If negligent behavior is unreasonable behavior, grossly negligent behavior is … really unreasonable behavior. How bad does behavior have to be to be grossly negligent? Who knows. In effect, negligent expresses reasonable-person vagueness whereas grossly negligent expresses floating negligence.

I have encountered the suggestion that even worse than grossly negligent is reckless, and worst of all is wanton. There’s nothing to support that. You have negligent and, if you wish, whatever is worse than negligent. Exactly how you express the worse-than-negligent standard is unlikely to matter, but grossly negligent is probably the most popular choice.

The biggest misconception regarding gradations of vagueness is the notion of a gradation of standards featuring efforts (or in England and some other Commonwealth jurisdictions, endeavours), with best efforts being the most exacting standard. It fails as a matter of semantics and contract logic. Furthermore, U.S. courts have said, with essentially one voice, that all efforts standards mean the same thing—reasonable efforts. Courts in other jurisdictions, notable England and Canada, have tried to articulate distinctions but have failed spectacularly.

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.