The Court in AIU Insurance Co., v. Philips Electronics North America Corp., et al., C.A. No. 9852-VCS reminds us that if a provision in an agreement has two or more meanings, it is ambiguous and the Court will decide its meaning.

At issue was the meaning of the word “audit” that was not defined in the agreement. As a result, the parties were in dispute as to the scope of information accessible in an “audit”.

BOTTOM LINE: The definition section of an agreement is key. Do not ignore the need to set out in detail what the parties should expect.