Distinguishing Between the Sources of Uncertainty in Contract Language

A recent opinion of the Court of Appeals of New Mexico, Sabatini v. Roybal (PDF copy here), caught my attention. It reminded me how tricky it can be to distinguish between the sources of uncertainty in contract language.

The phrase at issue was “private garage.” The district court had held that for purposes of a restrictive covenant, “private garage” meant only a garage capable of holding no more than a reasonable number of vehicles for the use of a single family, as opposed to the 100 foot by 50 foot structure built by the Roybals.

After noting that the phrase “private garage” was ambiguous, the court of appeals reversed, holding that the Roybal’s garage complied with the restrictive covenant, as (1) the garage was used to store the Roybals’ vehicles and was not available for use by the public and (2) the phrase “private garage” didn’t incorporate any limits on size.

The thing is, I don’t think “private garage” is ambiguous, ambiguity being a function of alternative meanings. If it had been ambiguous, the court would have had to explore parol evidence to ascertain the intent of the parties. It didn’t need to do that—instead, it simply made its own determination as to meaning.

I suggest that this dispute reflects another source of uncertainty, outright failure to address a given issue. The phrase “private garage” made it clear that the garage wasn’t to be used by the public, but the drafter failed to address another issue likely to arise in a Santa Fe, New Mexico subdivision—was there any limit to how big the garage could be? That’s very different from ambiguity, but practitioners and judges are prone to invoke ambiguity, whatever the source of uncertainty.

Chapter 6 of MSCD discusses the sources of uncertainty in contract language. When writing it, I decided to omit failure to address a given issue as a source of uncertainty, but I now think that was a mistake.

In a previous version of this post, I said that this case provided yet another instance of lexical ambiguity, which arises when a given word or phrase conveys more than one meaning. The fact that a few hours later I had to ditch that analysis shows that determining the source of a given uncertainty can require some thought. Performing that analysis is worthwhile—the better you understand the sources of uncertainty, the less likely you’ll be to include uncertainty in your contracts.

(By the way, I know that redoing a given post isn’t ideal, but getting stuff wrong is even worse. At least I’m fessing up to what happened!)

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.