A confusion or uncertainty about the intention or meaning, especially of a provision in a contract or statute. latent ambiguity. An ambiguity that is not obvious and is unlikely to be found while using reasonable care. For example, a third party contract that provides for a payment to be made to a charity, but two charities exist with the same name. Extrinsic evidence, if allowed, may be required to determine the correct interpretation of the ambiguity. However, if each party, in good faith i...