A contract term is ambiguous "[i]f more than one meaning is reasonably
consistent with the contract language." Grumman Data Sys. Corp. v.
Dalton, 88 F.3d 990, 997 (Fed. Cir. 1996). Ambiguity may be either
patent or latent.|
A patent ambiguity is "glaring"; it is so obvious from the face of
the contract that it would place a reasonable contractor on notice
of a discrepancy. Metric Constructors, Inc. v. NASA, 169
F.3d 747, 751 (Fed. Cir. 1999). Patent ambiguities raise an
exception to the general rule of contra proferentem, which
courts use to construe ambiguities against the drafter: a
contractor is under a duty to attempt to resolve a patent ambiguity
prior to bidding if the contractor subsequently wishes to rely upon
the provision. See e.g., id., Blue & Gold Fleet, L.P. v.
United States, 492 F.3d 1308, 1313 (Fed. Cir. 2007).
A latent ambiguity, by contrast, exists where a contract is
reasonably, but not obviously, susceptible of more than one
interpretation. In the case of a latent ambiguity, the rule of
contra proferentem applies to construe the ambiguity against
the drafter if the nondrafter's interpretation is reasonable, and
the nondrafter relied upon that interpretation. See Turner
Const. Co., Inc. v. United States, 367 F.3d 1319, 1321 (Fed.
Cir. 2004); Metric Constructors, 169 F.3d at 751. The
reasonableness of an interpretation is determined by ordinary
principles of contract construction.
[updated September 2013;
cited in USAM 4-4.420]