Avoiding ambiguous contract terms

When drawing up a contract, business owners in Colorado may find themselves in need of assistance to avoid ambiguous terms or language. Ambiguity occurs when one party to a contract interprets certain words and phrases in a different way than what the other party originally intended. If one party decides to terminate a contract, a differing interpretation of how to end it within the terms of the agreement may result in a legal dispute.

Creating a contract with clear and easy-to-understand terms ensures that a business or property owner can maintain the arrangement in a way that bests fits the intended purpose. The owner of a building in Denver’s evolving Sunnyside neighborhood, for example, entered into a commercial real estate lease agreement with a Denver-based grocery store proprietor. Before the lease was set to expire, however, the property owner sent a notice to the store’s proprietor to vacate the premises within 30 days.

Terms regarding vacating property may cause some misunderstanding

As reported by KUSA 9 News, the store’s proprietor filed a legal action against the property owner, and the court ruled against the owner, noting the ambiguity of the contract terms regarding the 30-day termination notice. Generally, a 30-day vacate provision is a blanket term reserved for use by volatile businesses that may wish to terminate a lease ahead of time during a period of economic hardship. The grocery store, however, was not experiencing financial problems.

A property owner has the right to rent her or his commercial space only to particular types of businesses. In this case, the property owner decided he wanted a different type of business operating out of his property. The language in a contract, however, must specify which kinds of businesses may or may not operate out of the property owner’s location.

Across a wide range of business and leasing arrangements, unambiguous terms with clear and descriptive wording may help in protecting parties involved in a contract from entering into a legal dispute.