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ambiguous language in business contracts

How Ambiguous Language Could Cost You in a Business Contract

There are several challenges to owning your own business. Your clients, vendors, partners, and other stakeholders will have certain expectations from their business relationship with you.

Business contracts can be useful in avoiding disputes and financial losses and protecting your business interests. Based on this, ambiguity with regard to the terms and conditions in the contract may end up causing a business dispute and eventual losses for you. Working with an experienced business law attorney can help you protect your rights.

What Constitutes Ambiguous Language in a Business Contract?

Business or commercial contracts that can be reasonably subjected to multiple interpretations are considered to be ambiguous in nature. This can mean that the language used within the contract doesn’t clearly depict what all involved parties intend. Ambiguous contracts usually mean that a materially important word, term, definition, or phrase is unclear or vague.

Serious discussions are often required to resolve any disputes arising out of an ambiguous contract. In certain cases, the situation may end up in a legal dispute.

You may attempt to resolve any issues that crop up, but it is still possible that the other party may walk away after deciding to take their business elsewhere if they are unhappy with the vague terms used in the contract. Or worse, you may get entangled in a prolonged and expensive legal battle if the other party claims a breach of contract.

Complications Arising from an Ambiguously Worded Business Contract

A single business contract should not be used with multiple types of clients and vendors. This may not be in your best interests. Changing or chopping a template can prove to be risky. You may miss out on including vital information. Alternatively, you may leave sections within the contract that are not really required.

All clients don’t act with integrity. Rather than losing business, you may get stuck with a client that demands more than you signed up for. Having room within a business contract for exploitation can only spell trouble in the long run.

Business disputes end up being costly and time-consuming. You need to get the legal terms of the contract exactly right when outlining the terms of a relationship with a new client.

Ambiguity in the contract terms may make you seem unscrupulous or unreliable. Cautious clients may not want to enter into a business relationship with you.

Avoiding Ambiguous Language in Business Contracts

The best intentions may not be able to help you keep ambiguities out of your business or commercial contract. It’s recommended to always work with a capable business attorney or another learned professional while drafting business contracts.

These tips can help you avoid ambiguities to a certain extent:

  • Writing: You should always put all terms and conditions in writing within the contract.
  • Multiple interpretations: You should ensure that all phrases and terms that have multiple meanings, mean the same thing for all parties. You may also want to make a note of all alternative meanings.
  • Other documents: Attach all related documents to the contract that may be used at a later date for clearing disagreements.
  • Review: Each party should be allowed a full and complete review of the contract before assenting and signing off on it.
  • Legal advice: You should speak with an experienced contract attorney for professional advice. Have them review the contract before you present it to the client for removing any ambiguities that may cause future problems.

There are various types of free business contract templates available on the internet. It is recommended that you stay clear of them. In fact, you should not use these templates as a foundation as well.

The language used in these contracts is ambiguous and may cost you. The language used within a contract should always be explicit and not open to multiple interpretations.

These contracts intentionally use vague language to cater to a wide array of businesses. This type of language may leave your business open to disputes and lawsuits. The words used within the contract should reflect an accurate meaning. You should avoid bad-faith arguments and misunderstandings as well.

Seasoned Lawyers Can Create Airtight Business Contracts

There are several different aspects to a business contract. The best-written contract may contain ambiguous terms if you are an amateur. Contract attorneys can help resolve such issues.

You should consider involving them prior to the drafting and negotiating stages. Accomplished attorneys, who have seen every kind of legal predicament imaginable, will always keep your best interests at the forefront and represent you in court in case of a breach of contract lawsuit.

You cannot predict and write all possible situations in a contract. Trying to fill in too much into a contract can prove contradictory to your interests as well. The other party may find you untrustworthy if you try to cover all eventualities with precise, narrow, and descriptive language. They may reject the contract entirely.

An attorney can save you time, energy, money, and future potential business by avoiding both ambiguities and microscopic language.

Get Legal Help from an Experienced Alabama Business Contract Attorney

Ambiguity in your business contracts can prove to be costly in the long run. The skilled business lawyers at Birmingham Law Group can help ensure there are no vague terms or phrases used in the agreement or business contract. We can also help you with various other matters related to business law. To set up a complimentary initial consultation, call (205) 964-9764 or reach us online.