It drives me a bit crazy sometimes when parties to transaction agreements request for ambiguous provisions to be included into agreements.

By that I mean provisions which beg one or a combination of the following questions:

-What needs to be done to achieve the desired result?
-Who is responsible?
-How is it going to be done?
-When the obligations need to be done?
-What happens if the objective is not achieved?

“We want to keep things open.”
“We don’t have visibility yet.”
“But we still want to say something about it.”
These are the usual reasons given for wanting to include ambiguous provisions in contracts.

It goes against our nature or training as lawyers to purposely draft something vague. We have been taught that in order to create a binding contract, the terms must be sufficiently certain for the courts to enforce. Lawyers are trained to draft as clearly as possible.

But law schools have not taught us what to do if the contracting parties want to keep the terms vague.

Sometimes vague clauses are included for what I think as “placebo effect” and appear to be harmless. Having those clauses in the agreements make the parties feel better about their relationship with each other although legally, the clauses do not seem to achieve anything.

However, some clauses are just too important to be left open for interpretation.

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This post was first posted on Linkedin on 7 October 2022.