Contracts II

Ambiguity

A term is ambiguous when there are two reasonable interpretations of it.

There are two approaches to determining whether or not a contract is ambiguous:

  1. Four Corners Test

    The older four corners test says an ambiguity only exists if an ambiguity exists in within the four corners of the document.

  2. Corbin Approach

    The Corbin approach, followed by the Restatement, says that a court should admit all evidence to determine the intent of the parties and whether or not the agreement is ambiguous.

[A] usage should be allowed to modify the apparent agreement, as seen in the written terms, as long as it does not totally negate it.