Pragmatics is a subfield of linguistics and semiotics which studies the ways in which context contributes to meaning. Pragmatics encompasses speech act theory, conversational implicature, talk in interaction and other approaches to language behavior in philosophy, sociology, linguistics and anthropology. Unlike semantics, which examines meaning that is conventional or "coded" in a given language, pragmatics studies how the transmission of meaning depends not only on structural and linguistic knowledge (e.g., grammar, lexicon, etc.) of the speaker and listener, but also on the context of the utterance, any pre-existing knowledge about those involved, the inferred intent of the speaker, and other factors. In this respect, pragmatics explains how language users are able to overcome apparent ambiguity, since meaning relies on the manner, place, time etc. of an utterance.
The ability to understand another speaker's intended meaning is called pragmatic competence.
The sentence "You have a green light" is ambiguous. Without knowing the context, the identity of the speaker, and his or her intent, it is difficult to infer the meaning with confidence. For example:
It could mean that you have green ambient lighting.
It could mean that you have a green light while driving your car.
It could mean that you can go ahead with the project.
It could mean that your body has a green glow.
It could mean that you possess a light bulb that is tinted green.
Similarly, the sentence "Sherlock saw the man with binoculars" could mean that Sherlock observed the man by using binoculars, or it could mean that Sherlock observed a man who was holding binoculars (syntactic ambiguity). The meaning of the sentence depends on an understanding of the context and the speaker's intent. As defined in linguistics, a sentence is an abstract entity — a string of words divorced from non-linguistic context — as opposed to an utterance, which is a concrete example of a speech act in a specific context. The closer conscious subjects stick to common words, idioms, phrasings, and topics, the more easily others can surmise their meaning; the further they stray from common expressions and topics, the wider the variations in interpretations. This suggests that sentences do not have meaning intrinsically; there is not a meaning associated with a sentence or word, they can only symbolically represent an idea. The cat sat on the mat is a sentence in English; if you say to your sister on Tuesday afternoon, "The cat sat on the mat," this is an example of an utterance.
Thus, there is no such thing as a sentence, term, expression or word symbolically representing a single true meaning; it is underspecified (which cat sat on which mat?) and potentially ambiguous. The meaning of an utterance, on the other hand, is inferred based on linguistic knowledge and knowledge of the non-linguistic context of the utterance (which may or may not be sufficient to resolve ambiguity). In mathematics with Berry's paradox there arose a systematic ambiguity with the word "definable". The ambiguity with words shows that the descriptive power of any human language is limited.