Question

Explain why the preemption issue is important and what happens when there is an ambiguity in a contract term?

Answer 1

Preemption in legal term means that one of the authorities have enacted a law and occupied that field in order to prevent others from making conflicting laws. For example, the federal legislation may pass a law to make a drug illegal when there is no state law that makes the drug illegal. In such case the drug become illegal and states may not be able to enact laws to make the drug legal. This is preemption.

This is important because it divides the power of federal bodies and state bodies in creating law and prevents stepping on each other’s toes.

When there is an ambiguity in contract term, there may be conflict of opinion. There may be an apparent breach of contract from the view point of one party while it may be perfectly normal from the view of the other party. There are several ways to deal with ambiguous contract terms. Some of them are

Use of common understanding

Use of industry specific understanding

Reasonable agreement

Implied meaning

In most cases, if one of the parties is more experienced in dealing with contracts and has been found to have drafted the ambiguous contract the court may rule against the party as it may demonstrate intention of misleading.