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Richard Raysman and Peter Brown

Ambiguity is one of the worst fears of a contract drafter. Despite good intentions, invariably contract terms will be capable of being understood in more than one way, or are simply doubtful, equivocal, uncertain or absent. A seminal treatise on “The Language of the Law” began: “The law is a profession of words.” Unsurprisingly then, one of the law’s most important functions is to resolve interpretative problems created by the use of ambiguous language in contracts; however, by the time a court is deciding the issue, costly litigation may have taken years. In a recent case in Pennsylvania, parties to a software development and license agreement confronted this unfortunate truth, and both left unsatisfied. See Apacheta Corp. v. Lincare, Inc., No. 16-2030, 2017 WL 5901085 (E.D. Pa. Nov. 30, 2017). In this case, a dispute over software deliverables led to litigation in which the court denied both parties’ motion for summary judgment because the ambiguity in the underlying agreement created an issue of fact as to what the developer was required to deliver, and if the developer made a sufficient delivery, its entitlement to damages.

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