3.13 Intentional Vagueness
As noted at Item 1.4, a draftsperson will on occasion leave an issue vague for fear of a more pointed treatment. The use of flexible words such as “reasonable” and “materially” is considered at Item 5.16. “Vagueness” should be distinguished from “ambiguity.” A provision that does not have a precise meaning is considered to be vague, that is, its meaning is indistinct. A provision is ambiguous if it is capable of being interpreted in more than one way.
There is a significant distinction between the use in a contract of vague or flexible terms such as “material” and “reasonable” whose meanings have been construed by case law applicable to particular circumstances and drafting a document that is not sufficiently certain as to constitute an enforceable contract. The underlying principle is that although courts will not favor finding that by reason of uncertainty an understanding is not a legally enforceable contract, they will do so in appropriate circumstances if there is no reasonable basis for the court to determine the parties’ intentions.
A lawyer on occasion will use or permit an ambiguity to remain in a document or even intentionally use an ambiguity knowing or at least believing that were the ambiguity resolved during the document negotiation, the resolution would not be advantageous to her client. The lawyer hopes that if and when the issue relating to the ambiguity arises the relative strengths of the parties will permit her client to prevail in the ensuing negotiations or, if it goes that far, the ambiguity will be resolved in favor of her client by a judge or arbitrator. Ambiguities identified as such by the attorneys on each side are also often permitted to remain in documents because the parties or their attorneys sense either that it is just not worth the time and effort to attempt to resolve the ambiguity or the process of seeking a resolution may adversely impact on the probability of the deal actually being made.
    The answer to the question of whether a court will imply an obligation not to unreasonably withhold consent will vary according to the jurisdiction and will even, on occasion, vary in the same jurisdiction according to context. Several American jurisdictions have either adopted, or at least in opinions referred to, the English rule that a requirement that consent not be unreasonably withheld will be implied only if necessary to give the contract “business efficacy,” while other American courts have in particular circumstances implied a reasonableness standard. Also one cannot be sure that the law in a particular jurisdiction may not change during the life of a contract, and if it does, whether the new law will or will not be applicable to a controversy that may arise. As a result, it is best to try to have your position articulated in the document. But what if you are afraid that if you broach the issue you will end up with the “wrong” result? Under such circumstances, you should try to determine the law of the applicable jurisdiction. Also consider the possibility that if the agreement specifically requires your client not to unreasonably withhold consent, she might be subject to a damages claim if it is determined that her actions in refusing consent were unreasonable, while if the language is not included in the agreement but is implied by law the only remedy might be to permit the action for which consent was sought to go forward although consent was not actually granted.