Patent and Latent Ambiguities in a Contract

The video tutorial discusses the parole evidence rule, which excludes prior or contemporaneous communications from influencing contract interpretation. It explains the concept of ambiguities in contracts, distinguishing between patent and latent ambiguities. Patent ambiguities are obvious and may allow extrinsic evidence for interpretation, while latent ambiguities are not apparent and require evidence to demonstrate their existence. The video also notes that courts may not always differentiate between these ambiguities, using extrinsic evidence to clarify terms.

What does the parole evidence rule primarily exclude from contract interpretation?

• Verbal agreements made after the contract

• Future communications

• Contemporaneous or prior communications

• All written evidence

What is a key characteristic of a patent ambiguity in a contract?

• It is hidden and requires evidence to be identified

• It cannot be resolved with extrinsic evidence

• It is obvious and can be identified by the court

• It is only recognized by one party

How can extrinsic evidence be used in the case of a patent ambiguity?

• To rewrite the contract

• To demonstrate the existence of the contract

• To clarify the common meaning of the terms

• To introduce new terms into the contract

What distinguishes a latent ambiguity from a patent ambiguity?

• It requires extrinsic evidence to be identified

• It is immediately obvious to the court

• It is a result of a clerical error

• It is always resolved without evidence

How do courts sometimes handle patent and latent ambiguities?

• They ignore extrinsic evidence for both

• They always favor the interpretation of the stronger party

• They treat them as completely separate issues

• They treat them collectively to determine ambiguity