Question

We frequently encountered the challenges created by “muddy rules” (rules with significant ambiguity) in partnership, corporate governance, and securities regulation. Does intentional ambiguity in statutes, rules, and regulations produce positive incentives and policy effects? Please elaborate why or why not with reference to particular facets of partnership, corporate governance, and securities regulation.

Answer 1

Ans :The concept of ambiguity plays an underappreciated and undertheorized role in the judicial review of agency statutory interpretations. Its importance is difficult to exaggerate. Ambiguity often functions as the determiner of whether an agency’s statutory interpretation will receive deference, as well as whether courts will apply the stare decisis standard for statutory interpretation cases instead of the recent principle that agencies can change their interpretations even in the face of a previous conflicting judicial interpretation. The prominence of ambiguity has caused many commentators and courts to proclaim a bright line distinction between interpretive tools that help evaluate statutory clarity and those that resolve statutory uncertainty. Although linguists would agree that ambiguity is unexceptional in normative legal texts due to its ubiquity, the judiciary, which has created a highly idiosyncratic definition, is far more selective about declaring language to be ambiguous .

Paradoxically enough, the word ambiguity itself has more than one interpretation. One of the senses, what I call the general meaning, has to do with how language is used by speakers or writers and understood by listeners or readers. Ambiguity occurs where there is lack of clarity or when there is uncertainty about the application of a term. It is this sense of ambiguity that generally is meant within the law. The other sense, the restricted meaning, is concerned with certain lexical and grammatical properties that are part of the very fabric of language, irrespective of anyone's usage or understanding. A word may have multiple definitions or a group of words may partake of more than one grammatical parsing. Linguists and grammarians have extensively investigated these features of language.

Corporate law (also known as business law or enterprise law or sometimes company law) is the body of law governing the rights, relations, and conduct of persons, companies, organizations and businesses. The term refers to the legal practice of law relating to corporations, or to the theory of corporations. Corporate law often describes the law relating to matters which derive directly from the life-cycle of a corporation.It thus encompasses the formation, funding, governance, and death of a corporation.

Governance comprises all of the processes of governing – whether undertaken by the government of a state, by a market or by a network – over a social system (family, tribe, formal or informal organization, a territory or across territories) and whether through the laws, norms, power or language of an organized society. It relates to "the processes of interaction and decision-making among the actors involved in a collective problem that lead to the creation, reinforcement, or reproduction of social norms and institutions". In lay terms, it could be described as the political processes that exist in and between formal institutions.