AVOIDING CONFLICT: CLARIFYING CONTRACTUAL AMBIGUITY
Ambiguity is a fundamental obstacle to contractual clarity. Outside minor quibbles over the ‘i’s’ and the ‘t’s’, a contract should be a clean, concise document that leaves parties in no doubt as to their roles and responsibilities.
Indeed, ambiguity – which can be defined as anything that can reasonably be interpreted in more than one way or lacks detail sufficient to know how the parties intend to act – may result in a contract that is misunderstood, disputed and destined for litigation.
Such ambiguity can also cost contracting parties time, money and reputation. To avoid legal teams having to spend valuable time interpreting and clarifying terms that should have been clear from the outset, it is important that parties take measures to minimise any potential obscurity in a contract.
“The importance of writing out and agreeing upon the terms of a contract clearly and concisely cannot be overstated,” asserts William Piercy, a shareholder at Berman Fink Van Horn P.C. “A well-defined contract establishes and memorialises expectations, rights and responsibilities, reducing the potential for misunderstandings, disputes and distractions.
“A clear contract is one of the best expectation management tools available,” he continues. “When parties to a contract expressly discuss, understand and agree at the outset on the core terms – who will do what, when and in exchange for what – it is much easier to track compliance and ensure accountability.”
Jul-Sep 2025 issue
Fraser Tennant