Legal Definitions - ambiguity

Ambiguity refers to a situation where language, particularly in legal documents such as contracts, statutes, or regulations, can reasonably be understood in more than one way. This lack of clear, singular meaning creates uncertainty about the true intent or obligation. When ambiguity exists, it can lead to disputes because different parties may have equally plausible, yet conflicting, interpretations of the same words.

Ambiguity is generally categorized into two types:

• Patent ambiguity is evident directly from the words used within the document itself. The language on its face is unclear, vague, or has multiple possible meanings without needing any outside information to reveal the confusion.
• Latent ambiguity is not immediately obvious when reading the document. The language appears clear and unambiguous on its own, but a problem arises when that language is applied to the specific facts or circumstances outside the document. External information reveals that the seemingly clear language actually has more than one possible meaning in that particular context.

Here are some examples illustrating ambiguity:

• Example 1 (Patent Ambiguity in a Contract): Imagine a contract for a landscaping project that states, "The contractor will install new plantings around the perimeter of the property."

  This phrase presents a patent ambiguity. Does "perimeter" refer to the property line as defined by a survey, the edge of the existing lawn, or the fence line? Each interpretation could lead to a different scope of work and cost. The ambiguity is evident directly from the word "perimeter" itself, which can have multiple reasonable meanings in this context.

• Example 2 (Latent Ambiguity in a Sales Agreement): Consider a written agreement for the sale of a vintage car that specifies, "Seller agrees to sell the 'Mustang' to Buyer for $50,000."

  On its face, "the 'Mustang'" seems clear. However, if it's later discovered that the seller owns two vintage Mustangs—one a 1965 model and the other a 1968 model, both in excellent condition—a latent ambiguity arises. The language itself isn't vague, but when applied to the external fact of the seller owning two such cars, it becomes unclear which specific "Mustang" was intended for sale.

• Example 3 (Patent Ambiguity in a Company Policy): A company's travel policy states, "Employees traveling for business are entitled to reimbursement for reasonable meal expenses."

  The term "reasonable" creates a patent ambiguity. What one employee considers a reasonable meal expense (e.g., a $20 lunch) another might consider excessive (e.g., a $75 dinner), while a third might find it too restrictive. The policy's wording is inherently subjective and open to multiple interpretations without further definition, leading to potential disputes over reimbursement claims.