Resolving Contract Disputes Over Unclear Terms Through Litigation

Resolving contract disputes often becomes difficult when the agreement in question contains vague or unclear language. One party may believe a breach of contract occurred, while the other insists they fulfilled their obligations. In these situations, litigation might be necessary to determine how the contract should be interpreted and whether the parties complied with its terms.  

Contract disputes sometimes stem from bad-faith business practices, including situations in which one party never intended to honor the agreement. More commonly, however, disputes arise because the contract language itself leaves room for different interpretations. Ambiguity is especially common when businesses or individuals rely on generic fill-in-the-blank forms, or attempt to draft contracts without legal guidance. People unfamiliar with contract law might unintentionally include vague wording that creates confusion later.

When disputes involve ambiguous language, courts often examine more than just the written agreement itself. Judges may review communications between the parties before the contract was signed, the conduct of the parties after signing and the ordinary meaning of disputed terms. The goal is to determine how a reasonable person would interpret the language and what obligations the parties intended to create.

In some cases, mediation facilitated by a third-party neutral can help those dealing with the contract dispute discuss how they interpreted specific language and find a way to compromise based on the expectations of both parties. However, mediation is not always successful, particularly when the disagreement significantly affects financial obligations or business operations. 

Under the commonly-applied contra proferentem rule, the courts tend to favor the party that did not draft the agreement in situations where people can interpret contract clauses in two different ways. This principle is frequently invoked during insurance policy disputes. The courts often interpret vague policy language in a manner that is favorable to policyholders rather than the insurer that generated the document. In general, the party that drafted the contract has the burden of proof when responding to allegations of vague and confusing language that triggers disputes about contract obligations.

When a disagreement regarding the interpretation of a contract’s language erupts, strong support from an experienced contract attorney is an essential part of securing a favorable resolution. 

The Law Offices of Donald W. Hudspeth, P.C., handles the drafting, review and enforcement of Arizona contracts. Schedule a consultation in our Phoenix office by contacting us online or calling 866-696-2033.