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.