Avoiding Ambiguity In Your Contracts And Agreements

If there is one mortal enemy to enforceable contracts, it’s ambiguity, or vague terms. The first thing that someone will try to do when they are sued for breaching a contract is to try to argue that a term or condition of the contract is unenforceable because it is vague.

There are ways that a court will interpret vague or ambiguous terms, but that’s not a great place for you to be—you’d rather avoid the ambiguity in the first place, and take interpretation out of a court’s hands. But how do you do that?

No Guarantees

There is no way to entirely ensure that the other party to your contract won’t argue that some term or condition is vague, confusing, open to interpretation, or ambiguous. People can always make an argument. But there are some things that you can do to lessen the possibility that happens—and to help you win your case, if the other side does raise that defense.

Here are some general tips that you can use to avoid the other party from arguing that your contract is ambiguous:

1. Include a definition section– Many contracts have a separate definitions section, where the terms that are used in the contract are defined. This can be a way to spell out exactly what you mean when you use certain words.
2. Avoid subjective terms – It is always best to avoid subjective terms. Saying that a job is complete when it is done in a “satisfactory” manner, is vague. Saying that items provided must be “fit for use” certainly leaves room for argument. Staying with objective and tangible terms is always best.
3. Using industry terms – In some industries, a term can mean something different than it means in “the real world.” Which definition do you mean? If your particular industry, business, or trade has “terms of art” that may have a different meaning than what the general public would think they mean you should say so
4. Avoid multiple contracts – Many larger jobs or tasks may have multiple contracts. For example, you may have a contract to do marketing for a company, a contract to do website hosting, and a contract to write content for the website. The problem is that a term, phrase, condition, duty or obligation in one of those agreements can easily conflict with or contradict a term in another agreement. The same goes here for amendments, subsequent agreements, or alterations. If you are executing an alteration or amendment, make sure that your amendment doesn’t conflict with the terms of a prior agreement (unless you specifically want it to).
5. Include a “no presumption” clause – In contracts, ambiguous terms will be defined against the party that drafted the contract. You can. However, include a clause that eliminates this presumption, which may be a good idea if you are the one drafting the contract.

Call the West Palm Beach business litigation attorneys at Pike & Lustig today to help review your business contracts.