Ambiguity is a legal conclusion, not a feeling. It decides whether a judge or a jury reads the contract.
Esshaki Legal Media TeamCurrent as of January 2023
Whether a contract term is ambiguous is a question of law for the court, and the
answer decides who interprets the contract. An unambiguous contract is construed
by the judge, often on summary judgment. An ambiguous one usually goes to the
factfinder with extrinsic evidence.
The standard. A term is ambiguous when it is reasonably susceptible to more
than one meaning. That two parties now argue for different readings proves
nothing; litigants always do. The competing readings must each be reasonable in
context.
Patent and latent ambiguity. A patent ambiguity appears on the face of the
document — two clauses that cannot both be true. A latent one appears only when
the contract meets the world, as when a description fits two different parcels.
What courts read first. The whole document, not the disputed sentence alone.
Provisions are read to give effect to every clause where possible, specific terms
control over general ones, and a reading that renders a paragraph meaningless is
disfavoured.
Contra proferentem — construing against the drafter — is a tie-breaker of
last resort in commercial cases between sophisticated parties, not an opening
argument.
Practically, ambiguity is a litigation multiplier: it defeats early
resolution, opens discovery into negotiation history, and puts the outcome in
front of a jury. That cost is the argument for spending an extra hour on the
drafting.