Legal Memorandum: Ambiguous Contracts in CO

Issue: Under Colorado law, when will a court find that a contract is ambiguous?

Area of Law: Business Organizations & Contracts, Litigation & Procedure
Keywords: Ambiguous contracts; Express provisions; Interpretation
Jurisdiction: Colorado
Cited Cases: 195 Colo. 253; 960 P.2d 134; 756 P.2d 362
Cited Statutes: None
Date: 11/01/2014

In a contract dispute, one argument raised may be that the agreement is unambiguous and must be enforced as written.  B&B Livery, Inc. v. Riehl, 960 P.2d 134, 136 (Colo. 1998) (unambiguous contract will be enforced according to its express provisions); In re May, 756 P.2d 362, 369 (Colo. 1988) (unambiguous contract expresses parties’ intentions and must be enforced according to its plain language).  “Terms used in a contract are ambiguous when they are susceptible to more than one reasonable interpretation.”  B&B Livery, 960 P.2d at 136. 

To determine whether a contract’s provisions are ambiguous, “the instrument’s language must be examined and construed in harmony with the plain and generally accepted meaning of the words employed, and reference must be made to all provisions of the agreement.”  Radiology Prof’l Corp. v. Trinidad Area Health Ass’n, 195 Colo. 253, 256, 577 P.2d 748, 750 (1978).  “The fact that the parties have different opinions about the interpretation of the contract does not of itself create an ambiguity.”  In re May, 756 P.2d at 369 (citing Radiology Prof’l Corp., 195 Colo. at 256-57, 577 P.2d at 750).  


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