There are several reasons why a contract might be unclear or incomplete.5
These different kinds of incompleteness
justify different legal responses and possibly argue for different methods of interpretation and supplementation.
Contractual incompleteness may be unintended or strategic. Largely corresponding to this distinction6
, gap-filling
rules can be either majoritarian (market-mimicking) or information-forcing (penalty) defaults. And “the approaches
used to interpret contracts have much in common with the approaches used to select default rules. In many cases, for
example, vague or ambiguous language is interpreted so as to fit whatever the parties probably would have agreed to
if they had discussed the matter, thus producing the same result as the majoritarian or market-mimicking default
rules (...). In other cases, vague or ambiguous language is interpreted against the party who drafted it, just as in the
case of a penalty or information-forcing default rule designed to induce more careful and explicit communication.”7