AMBIGUITY
Uncertainty or doubtfulness of the meaning of language.
When language is capable of being understood in more than one way by a reasonable person, ambiguity exists. It is not the use of peculiar words or of common words used in a peculiar sense. Words are ambiguous when their significance is unclear to persons with competent knowledge and skill to understand them.
There are two categories of ambiguity: latent
and patent. Latent ambiguity exists when the
language used is clear and intelligible so that it
suggests one meaning but some extrinsic fact or
evidence creates a need for interpretation or a
choice among two or more possible meanings.
In a classic case, Raffles v. Wichelhaus, 159 Eng.
Rep. 375 (Ex. 1864), a contract was made to sell
125 bales of cotton that were to arrive on a ship
called Peerless that sailed from Bombay, India.
Unknown to the parties to the contract, two
ships of the same name were to arrive from the
same port during different months of the same
year. This extraneous fact necessitated the inter-
pretation of an otherwise clear and definite term
of the contract. In such cases, extrinsic or PAROL
EVIDENCE may be admitted to explain what was
meant or to identify the property referred to in
the writing.
A patent ambiguity is one that appears on
the face of a document or writing because
uncertain or obscure language has been used.
In the law of contracts, ambiguity means
more than that the language has more than one
meaning upon which reasonable persons could
differ. It means that after a court has applied
rules of interpretation, such as the PLAIN MEAN-
ING, course of dealing, COURSE OF PERFORM-
ANCE,or TRADE USAGE rules to the unclear
terms, the court still cannot say with certainty
what meaning was intended by the parties to the
contract.When this occurs, the court will admit as evidence extraneous proof of prior or contemporaneous agreements to determine the
meaning of the ambiguous language. Parol evidence
may be used to explain the meaning of a
writing as long as its use does not vary the terms
of the writing. If there is no such evidence, the
court may hear evidence of the subjective intention
or understanding of the parties to clarify
the ambiguity.
Sometimes, courts decide the meaning of
ambiguous language on the basis of who was
responsible or at fault for the ambiguity. When
only one party knew or should have known of
the ambiguity, the unsuspecting party’s subjective
knowledge of the meaning will control. If
both parties knew or should have known of the
uncertainty, the court will look to the subjective
understanding of both. The ambiguity no longer
exists if the parties agree upon its meaning. If
the parties disagree and the ambiguous provisions
are material, no contract is formed because
of lack of mutual assent.
Courts frequently interpret an ambiguous
contract term against the interests of the party
who prepared the contract and created the
ambiguity. This is common in cases of adhesion
contracts and insurance contracts. A drafter of a
document should not benefit at the expense of
an innocent party because the drafter was careless
in drafting the agreement.
In CONSTITUTIONAL LAW, statutes that contain
ambiguous language are VOID FOR VAGUENESS.
The language of such laws is considered so
obscure and uncertain that a reasonable person
cannot determine from a reading what the law
purports to command or prohibit. This statutory
ambiguity deprives a person of the notice
requirement of DUE PROCESS OF LAW, and,
therefore, renders the statute unconstitutional.
