It’s best to understand what we mean when we say contract language is ambiguous.
For linguists, text is ambiguous if it’s capable of expressing two or more inconsistent meanings. If some who read a contract provision think it means one thing and others think it means something else, that provision is ambiguous. Because ambiguity creates confusion and causes many contract disputes, aim to eliminate ambiguity from contracts. There are different sources of ambiguity, and it gets complicated. For dozens of my posts about ambiguity, click here.
Ambiguity is just one of several sources of uncertain meaning in contracts. Vagueness is another. For my article Know Your Enemy: Sources of Uncertain Meaning in Contracts, Michigan Bar Journal (Oct. 2016), go here.
But here’s a nuance. Courts routinely discuss whatever alternative meanings the parties are arguing over, then use the broader context to decide which meaning prevails. (A couple of weeks ago I did this post about one such case.) On that basis, a court might say the language at issue isn’t ambiguous. I think the better approach is to say it’s ambiguous, but that the ambiguity was resolved by taking into account the broader context.
Sometimes people attribute alternative meanings to a contract provision that isn’t in fact ambiguous. (Even courts sometimes see ambiguity where none exists. See this 2021 post for an example of that.) Don’t describe such provisions as ambiguous—having people fight over meaning isn’t enough to make text ambiguous. Because people can fight over unambiguous provisions, it’s best not to be satisfied drafting contracts that are unambiguous. Instead, aim to be unambiguous and to avoid fights! For example, see this 2017 post about why I won’t rely on a comma to make text unambiguous. Instead, I’ll find a different way to say whatever I want to say.
That is all!
