What is the effect of an ambiguity in a contract?

An ambiguity in a contract is when a term or phrase is not clear in its meaning or could be interpreted in more than one way. Ambiguities in contracts can be problematic because they create confusion and can lead to misunderstandings between the parties involved and, potentially, disputes. In Texas, the effect of an ambiguity in a contract depends on the facts of the case. Generally, Texas courts will try to interpret the language of an ambiguous contract in favor of the purpose of the contract and the parties’ intentions. If the court is unable to determine the parties’ intentions, the ambiguity will be construed against the party who drafted the contract and who was in a better position to clarify the language used. The court may also look to parol evidence to determine the meaning of the ambiguity. Parol evidence is any evidence outside of the contract itself, such as oral statements, letters, emails, or other documents with relevant information and evidence about the parties’ intentions. This could include statements made by the parties during negotiations, previous drafts of the contract, or similar contracts that the parties had previously entered into. If it is not possible to interpret the ambiguity in the contract, the court may dismiss the ambiguous provision entirely in order to avoid an unfair interpretation of the contract and to prevent one party from taking advantage of the other. Ultimately, the court’s decision will depend on the facts of the case and the available evidence.

Related FAQs

What is the difference between a covenant and a contract?
What is the difference between an express and implied contract?
What is a promissory estoppel?
What is a merger clause?
What is a mutual rescission of a contract?
What is the Statute of Frauds applicable to?
What is the doctrine of privity?
What is an assignment of a contract?
What is an exculpatory clause?
What is a valid offer?

What is the effect of an ambiguity in a contract?

Related FAQs

Related Blog Posts