Everyone, at some point in their life, enters into a contractual transaction. It might be a simple contract, such as ordering an item of food from a fast-food restaurant. On the other hand, it might be more complex. For example, negotiating a hundred-year lease on a commercial property for a well-known business. For the average person, the majority of contracts will be straightforward to use. Sometimes, however, contracts may use vague terms that may impact the enforcement of the contract. Although this may happen in any contract, it most often happens with business owners attempt to negotiate contractual terms. In this article, we discuss the pitfalls of using vague contract terms and the impact it may have on enforcement.
The Problem Of Vague Contract Terms
Although vague terms may seem professional, without specification, a contract is open to interpretation. For a contract to be valid, there must be a meeting of the minds. Additionally, it must incorporate the thought process and understanding process of the parties involved. When the contract evokes vague terms such as “best efforts” or “good faith efforts,” this could have a different meaning to each party. Furthermore, vague contract terms make it impossible for the courts to know what the intent was for both parties. Therefore the court cannot construe the contract to meet those intents.
An example of vague contract terms is a clause that says, “the delivery company will make a good faith effort to deliver the package”. The problem with this clause is the phrase “good faith effort”. A good faith effort for the delivery company may be just attempting one delivery. The client, on the other hand, may feel a good faith effort to deliver would be at least three attempts.
To avoid this vagueness, the contract should read, “the delivery company will make three attempts to deliver the package”. If the delivery company does not deliver the package by the third attempt, they will leave an attempt of delivery notice with the recipient with instructions on how to retrieve the package”. In the new clause, the contract is clear on what is a good faith effort is.
Another problem that arises with the vagueness of a contract is that of vague timelines. Failure to use exact timing deadlines may cause a contract to be unenforceable. For example, if an employment contract has a clause that reads, “Upon the termination of the employee, the terminated employee must immediately turn in their employee ID card.”
In this clause, the vague timeline is with the word “immediately”. You can define immediately as within an hour or within two weeks. Both timelines might be immediate, depending on precedence. To avoid the problem of vagueness in the clause above, the contract should read, “Upon the termination of the employee, the terminated employee must turn in their employee ID card no later than 5:00 P.M. of the date of termination.
In the second example, the clause still attempts to get the same result, but it avoids the vagueness issue by defining an obligation on the employee and gives an exact time in which that obligation is to be met. If this issue were to arise in the courts, the court would be able to see an obligation was created, a timeline to fulfill the obligation, and be able to easily determine whether the obligation was met.
How Will Courts Interpret Vagueness In Contracts?
The courts will try to enforce a contract based on the overall contract and look at the clear terms to determine the intent of the parties. If the court is unable to do so, they may interpret vague terms with the following tools:
Common usage – the courts will use the dictionary meaning of any vague terms
Industry usage – if there are vague terms that are specific to the industry, then the court will look to the industry standard to enforce those terms.
Precedence – If there was precedence used in enforcing the terms of how it was previously applied to in the contract, the court would continue to enforce the precedence.
Contact Thompson Law
Whether you are looking to have a contract created, modified, or want to make sure you understand the terms of a contract before signing, contact Thompson Law. The attorneys at Thompson Law have years of experience in dealing with contracts under Florida law and will make sure that the contract avoids any vagueness that can make the contract unenforceable or open to interpretation.