Texas Causes of Action & Affirmative Defenses

Texas Causes of Action & Affirmative Defenses

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Monday, May 16, 2011

What makes a contract ambiguous?


AMBIGUOUS VS. UNAMBIGUOUS CONTRACTS IN TEXAS 

A contract is ambiguous if its meaning is uncertain or it is reasonably susceptible to more than one meaning. Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983); In re Marriage of Iberti, 64 Cal. Rptr. 2d 766, 769 (Cal. Ct. App. 1997) (“A term of the agreement is ambiguous if it is susceptible of more than one reasonable interpretation.”). An unambiguous contract will be enforced as written according to the plain meaning of the words used and “regardless of whether one or more of the parties contracted wisely or foolishly, or created a hardship for himself.” Wooten Props., Inc. v. Smith, 368 S.W.2d 707, 708-09 (Tex. Civ. App.-El Paso 1963, writ ref'd). Courts are not authorized to rewrite agreements by inserting additional terms, definitions, or provisions that the parties could have included themselves but did not, or by implying terms for which the parties have not bargained. Tenneco, Inc. v. Enter. Prods. Co., 925 S.W.2d 640, 646 (Tex. 1996). In other words, courts cannot make contracts for the parties. HECI Exploration Co. v. Neel, 982 S.W.2d 881, 888 (Tex. 1998).
 
SOURCE: Dallas Court of Appeals 05-06-00966-CV 5/10/11