The BUSKLAW Newsletter

(Author's Note: Props to Kilroy J. Oldster for coining the term "mental mist.") Contractual ambiguity - usually created when two provisions of the same contract irreconcilably conflict with each other - isn't pretty. At best, it's embarrassing to the lawyer who drafted the document; at worst, it thwarts the business purpose of the contract and may lead to litigation. A typical case of contractual ambiguity results when a contract incorporates another document in the text that conflicts with one or more provisions. This scenario played out in Klapp v United Insurance Group Agency ,  a 2003 Michigan Supreme Court case. The decision prescribes how a Michigan court should resolve contractual ambiguity. Craig Klapp was an insurance agent for United Insurance from 1990 to 1997. In 1990, he signed an "Agent's Agreement" that included a Vesting Schedule stating that on his retirement at an unspecified age and provided that he had worked at least t...

This is a follow-up to my recent post about contractual "gotchas." Some lawyers think that they're being crafty (and doing their clients a favor) by  deliberately introducing ambiguous provisions in a contract.  Plain-language expert Ken Adams points to an example from a 2007 post here . And negotiation expert and author Victoria Pynchon points to another example  (involving the meaning of "sudden and accidental" from environmental liability insurance policies) from her Negotiation Law Blog . This gamesmanship strategy is not only ethically questionable but also likely to backfire on the supposedly crafty lawyer because ambiguity often cuts both ways - and courts often interpret ambiguous provisions in a contract against the parties who drafted them.   A lawyer negotiating a contract under a tight deadline may use that pressure as an excuse to leave a disputed provision open to interpretation to meet the deadline. This is risky business - it may lead to co...