Ambiguity

In one sentence

Unclear or multiple reasonable interpretations of contract language.

Plain English

Ambiguity occurs when contract words can reasonably mean more than one thing. Courts interpret ambiguous language against the party who wrote it, since that person had the chance to be clearer. If both parties understood the same ambiguous term differently, a court may find no binding agreement existed, or it may look at how the parties actually behaved to figure out what they meant.

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Example

A painter agrees to paint a house "in earth tones." The homeowner imagines warm browns and tans, while the painter interprets it as muted greens and grays. Because "earth tones" is ambiguous, a court would likely interpret it against the painter (who drafted the contract) or examine what the homeowner said during negotiations.

Used in a sentence

“The contract's ambiguity about delivery dates made it impossible to determine when the seller actually breached.”

Related terms

Objective Theory of Contracts

The legal rule that contract meaning is based on what a reasonable person would understand, not secret thoughts.

Course of Dealing

The pattern of past transactions between the same parties, used to interpret current contract terms.

Course of Performance

How the parties have actually carried out the contract in practice, which can clarify ambiguous terms.

Mistake

A misunderstanding or error by one or both parties about a fact in a contract.

Implied Conditions

Conditions that courts infer must be met even though the parties did not state them.

Offer

A proposal to enter into a binding agreement on specific terms.

Acceptance

Agreeing to the exact terms of an offer, creating a binding contract.

Consideration

Something of value exchanged by each party to make a contract binding.

This page is a plain-English reference and is not legal advice. Laws vary by jurisdiction and change over time. For specific situations consult a licensed attorney.