In its recent opinion in Mosser Construction, Inc. v. Travelers Indemnity Co. (go here for a PDF copy), the Sixth Circuit Court of Appeals devotes several pages to the meaning of “subcontractor” for purposes of an insurance policy. Why? Because “subcontractor” exhibits lexical ambiguity: Is any supplier to the contractor a subcontractor, or is something more required?
I’ll leave you to consult the opinion if you want to see what the court decided. As usual, that’s of no immediate interest to me, given that drafters have the freedom to structure such matters as they see fit rather than following a court’s analysis.
Instead, the main lesson of this dispute is that if you draft a contract that refers to subcontractors, you might want to define that term in a manner that avoids confusion.