Say What You Mean – 3 Easy Steps to Avoid Ambiguous Agreements

By Jerry A. Nelson 

on May 5th, 2016

Posted in Commercial, Retail & Industrial Real Estate

Have you ever read a confusing contract and scratched your head? Whether it is a lease, operating agreement, or other contract, it is imperative to understand what you want. It is also important to negotiate and draft agreements quickly to avoid losing opportunities. Failure to clearly say what you mean can result in unexpected costs, disputes and lawsuits.

1.      Avoid Ambiguous Words

Black’s Law Dictionary states that language in a contract is “ambiguous” when it is reasonably capable of being understood in more than one sense. An easy tip is to avoid ambiguous words. However, this can be a challenge, since even words that seem clear to you, may not be clear to others.

For example, Black’s Law Dictionary includes two (2) different definitions of the word “shall.” The first definition is generally mandatory and can mean “must,” but the second definition is merely permissive and can mean “may.” These different definitions of the same word can lead to confusion. Even one small ambiguity with a word like “shall,” could be a big problem, since it is often used many times in many agreements. To prevent problems, some businesses, government agencies, and others, have recently replaced or defined ambiguous words in their agreements to ensure that their agreements say exactly what they mean.

2.    Avoid Ambiguous Drafting

Another way to avoid ambiguity is to ensure that all of the language in your agreements is clear. In addition to carefully choosing your words, you can also ensure that your other language is capable of clearly being understood. For example, an agreement that simply states that one party “must make repairs” can be ambiguous if it is not clear exactly what repairs are required, and whether maintenance and replacements are also required.

3.    Include Adequate Legal Language

It is also important to include adequate protections in your agreements to reduce risks and limit losses. For example, you can include a clause with sufficient language to ensure that any ambiguity will not be interpreted against you as the drafter of the document. You can also seek to include other protections, such as a remedy in the event a portion of your agreement is deemed invalid or unenforceable, and protections to limit your liability, legal fees and expenses in the event of a dispute.

If you want to avoid any ambiguity, you can improve and update your agreements. This is a good idea, since avoiding ambiguity can prevent problems, save time and money, and strengthen relationships. Experienced counsel can help you to avoid ambiguities and achieve your goals.

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