Two aspects of contract drafting are very important because they are probably the source of most contract interpretation issues disputes: ambiguity, and the use of vague terms. A contract drafter must, at all times, avoid creating ambiguity. For the use of vague terms, see section 3.2 (immediately following this one).
Almost every contract contains ambiguities, if only as a result of the trade off against the other drafting principles of being concise, using plain language and writing short sentences. This is a paradox because ambiguity is often the result of a drafter’s attempt to accurately capture all circumstances and exceptions potentially applicable in the context. Nevertheless, if it is clear that the scope of a provision does not cover a particular fact or event, it is counterproductive to include an exception. Including the exception permits an argument to be made that the scope of the provision is really intended to be broader than it appears; otherwise why would the exception be included?
Sources of ambiguity. There are two important causes of ambiguous language: lengthy sentences (addressing more than two topics), and the use of exceptions. Long sentences can often be avoided by simply splitting them up in several provisions, by deleting unnecessary words (see section ) or by introducing enumeration. The use of exceptions can be improved by grouping them and by formulating them consistently.
Example. Here is an example of where an inconsistent use (or positioning) of exceptions, limitations, and qualifications in one sentence may create ambiguity. For example:
Except as … X …, Seller shall not increase the salaries of any employee (other than Y…) above the levels in effect on the Signing Date, provided that increases may be made when … Z …
The above sentence contains three positions where exceptions are created. In the case of short exceptions, it will read much better if they are placed at the beginning. Conversely, if there are numerous exceptions, it is better to place the main point of the covenant (i.e. that the Seller shall not increase salaries) at the beginning, and to place all the exceptions consistently together, in a series at the end or in a separate sentence:
Seller shall not increase the salaries of any employee above the levels in effect on the Signing Date, except that Seller may (a) … X …, (b) increase the salary of Y…, and (c) provide for increases when … Z …
Visual enumeration is where a series is subdivided into enumerated subparagraphs; it is also possible to create exceptions on exceptions. This is often grammatically necessary, but subparagraphs tend to be an additional source of ambiguity to a reader.