One of the tasks of the contract draftsman is to try to avoid using words and phrases that could have more than one meaning. Here are a few expressions (only some of which regularly feature in contracts) that could mean the opposite of one another, depending on the context:
- To the Licensor’s knowledge, the moon is made of cheese… This is usually intended to mean “as far as the Licensor is aware”, but it could conceivably be interpreted as a statement that the Licensor has personal knowledge that enables him to assert positively the composition of the moon. We prefer to use the “as far as aware” formula, as it does not have this potential ambiguity. (There is a separate question as to whether such a warranty implies any duty to check or do searches, but that is a different issue.)
- Completion. In contracts, completion often refers to an event where formal documents are signed to give effect to a transaction, ie at the start of the transaction. The US equivalent of this is “closing”. However, completion of a contract could refer to when the work to be performed under a contract has been completed, ie at the end of the contract. We have encountered clients who have used the word with this sense. Where the word is used in a contract, it is prudent to check that there is no ambiguity in context.
- Sanction. This can mean “permit” or “prohibit”.
- Oversight. This can mean “supervision” or “mistake”.
- Screen. This can mean “hide from view” or “show”.
- Fabulous. This can mean “wonderful” or “unbelievable”.
More examples of auto-antonyms, as they are called, can be found here.
This is not the only type of ambiguity that can arise in contracts, but it is often the most striking to the reader.
5 responses to “Ambiguous wording in contracts”
Reblogged this on IP Draughts and commented:
This article appeared on this blog over 6 years ago, but it has come up in the viewing stats recently so it may be time for another airing…
Would not recommend using the contra proferentum rule as an argument against a party relying on the ambiguous wording, or the “creative ambiguity”?
Once in a blue (cheese) moon, when parties can’t resolve an issue to mutually understood point, lawyers/drafters deliberately choose ambiguous wording to preserve the argument. Not ideal, often fraught with peril, but of such gum and duct tape are some bridges wrought.
Sometimes called “creative ambiguity”. But in view of (one UK application of) the contra proferentem rule (ambiguous wording is construed against the interests of the party seeking to rely on it), not something we would recommend.
One USA/UK example is “moot” as an adjective, although the word is more likely to be used in court than in a contract.
in UK moot means “worthy of serious argument”. On the evidence of Webster’s Dictionary this was the only meaning in USA until the late 1940s. Now, moot is an established legal term designating an issue as closed and dismissed from any further consideration by the tribunal, particularly because of a change in circumstances or context. The reasoning appears to be that any further argument is purely academic with no practical consequences.
Does anybody know when and why USA reversed the meaning of the term?