Pernicious Ambiguity in Contracts and Statutes

This Article explores pernicious ambiguity, an interpretive problem that is not adequately acknowledged by the legal system. Pernicious ambiguity occurs when the various actors involved in a dispute all believe a text to be clear, but assign different meanings to it. Depending upon how the legal system handles this situation, a case with pernicious ambiguity can easily become a crapshoot. If the judge does not take heed of the competing interpretations as reflecting a lack of clarity, and if that judge happens to understand the document in a way helpful to a particular party, that party wins. Because the document is not seen as ambiguous, the document is declared clear. In reality, however, the document is even less clear than are ambiguous documents. The competing interpretations reflect a complete communicative breakdown. If language worked so poorly generally, it would not be possible to have a language-driven rule of law at all. The problem, perhaps ironically, is that the concept of ambiguity is itself perniciously ambiguous. People do not always use the term in the same way, and the differences often appear to go unnoticed. While all agree that ambiguity occurs when language is reasonably susceptible to different interpretations, people seem to differ with respect to whether those interpretations have to be available to a single person, or whether ambiguity occurs when different speakers of the language do not understand a particular passage the same way. Often, courts even ignore disagreement among judges as irrelevant to whether a document is clear on its face. This Article will show how these different notions of ambiguity emerge, and offer some explanations based on advances in linguistics, cognitive psychology, and the philosophy of language. Examples are taken from cases concerning the interpretation of statutes, contracts, and insurance policies