Many successful business relationships have clear, unambiguous contracts as bedrock. When terms are unclear, they can create confusion and often cause disagreements between parties.
When disputes arise, they can be costly and time-consuming. This is why clear contract language matters in protecting your company’s interests.
What causes contractual ambiguities
Contractual ambiguities can stem from:
- Vague language: Phrases that are too general or lack specific details.
- Inconsistent terms: Clauses that contradict each other within the same contract.
- Undefined terms: Words or phrases not clearly defined within the document.
- Complex legal jargon: An overly complicated language that confuses the parties involved.
For instance, suppose a contract states that one must make payment “promptly”. One party may interpret this as immediate payment, while another might think it means within 30 days. Another example is when an agreement for the sale of goods does not specify the quality of the products. The seller might argue that standard quality is sufficient, while the buyer expects premium quality.
These ambiguities can result in various disputes, all of which can severely impact businesses. These can include drained resources and damaged business relationships and tarnished reputations.
Seeking help when litigation is needed
Despite best efforts, some contractual disputes may require litigation. In North Carolina, courts often interpret ambiguous contracts by examining the parties’ intent at the time they made the contract. They consider the entire agreement and its purpose. If ambiguities remain, the court may interpret the language against the party who drafted the contract.
When confronted with such entanglements, it is best to enlist the experience of a skilled attorney in business litigation. They can help negotiate resolutions and represent your interests in court if necessary.