Ambiguity is the Death of all Contracts/Agreements

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Have you ever signed a contract or agreement only to realize later those terms weren’t quite clear enough? The lack of clarity likely caused problems with completion of the contract to both parties satisfaction. One of the tips in my Think Like A Negotiator book is “Read It.” Reading it means understanding the terms before you sign and getting any ambiguous terms in language that spells out their meaning and is clearly understood by both parties.

Ambiguity in contracts or agreements will cause more problems for both parties than any other contract issue. If a contract reasonably has more than one interpretation, it would be considered ambiguous. What this means is that one or more words or terms are vague or unclear.

The best way to resolve ambiguity in contracts is discussions and getting clarity of terms PRIOR to signing the contract. It is much more difficult after the fact to discuss or modify terms of the contract once signature has occurred or payment has been made in advance of the work. At that point it may be necessary to take it to court if the problem is considered significant enough. That of course is an individual decision. It would be prudent to agree through discussions to modify the terms.  However, sometimes that simply will not work without court interaction.

Recently my daughter leased a studio apartment and as I was reading over the lease agreement, I noticed many terms that weren’t in the standard lease agreements you typically see.  Things such as “do not put wax on no wax floors – waxing no wax floors will incur a fee of X for removal/repair of flooring” and  “do not hang rails or racks on any doors within the residence.”

There were several more similar clauses in the lease agreement that spelled out exactly what she could or could not do. This typically happens due to prior renters damages which caused excessive expense for the owner. The owner wanted to make the lease clear on what was and was not acceptable to ensure this doesn’t happen in the future. Spelling the terms out in the lease agreement insures everyone is clear on what can and cannot be done. There is no assumption for the most part on the requirements of this particular lease.

There are many things to consider when reviewing an agreement on whether or not terms are clear and unambiguous. Here are two examples of ambiguity in a contract that may in fact cause problems:

1. We will use our proprietary marketing strategy to ensure X.

Proprietary marketing strategy? – what exactly does that mean? It could be anything. It leaves a lot to interpretation and the provider could do anything and say they fulfilled the contract. If it’s not completely spelled out, you don’t know what you are getting. Make sure the terms are more specific with definitions of what “proprietary marketing strategy” includes.

2. We will install quality window treatments in your home.

What is the definition of quality? This word could mean different things to different people. Instead of using the word quality only, ask them to define what quality means. Perhaps with manufacturer models or product examples. You could end up with one step above dirt cheap which may not be your idea of quality.

It’s always advisable to have contracts reviewed by a competent contracts attorney or contracts professional. Have another set of eyes not involved in the contract read it over and see if they identify anything you didn’t see. Again, you want to ensure you get clarity of terms prior to signing on the dotted line.

Contracts are in place for protection and clarity. Ensure your contracts are clear as to what the finished product or service will include.

You can now get Think Like A Negotiator on Kindle.  Check it out here: Think Like A Negotiator Kindle Version

Eldonna Lewis Fernandez
Eldonna Lewis Fernandez

Veteran negotiation and contracts expert Eldonna Lewis-Fernandez, author of “Think Like a Negotiator,” has over 30 years of experience crafting killer deals both stateside and internationally, many in excess of $100 million. She’s currently the CEO of Dynamic Vision International — a specialized consulting and training firm that helps individuals hone negotiation skills — as well as a nationally regarded keynote speaker, session leader and panelist on the Art of Negotiation. Eldonna may be reached online at www.EldonnaLewisFernandez.com

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