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An utterance can be defined simply as a section of spoken speech, separated by pauses or silence. The specific definition of the term is hard to pin down, because some people believe it to relate to an entire spoken "turn" in a conversation, while others believe the definition to be more episodic, almost the equivalent of sentences for spoken English. Regardless of the preferred definition, an utterance can be generally defined as a chunk of spoken language.
Spoken language and written language are different in many ways. The main reason for this is that spoken language is usually generated on the spot by the speaker, which means that there are frequent pauses while the speaker thinks of how to continue. These pauses are often filled with filler words such as "like" or "err..." or silence. Conversely, written language only has grammatical pauses, such as a period or comma, to dictate when a pause should be taken. As a result of this difference, in written language, a sentence can easily be defined as the words between the capital letter and the period, but in speech, the definition is much more difficult.
The difficulty in defining sentences in spoken language has lead to the need for the term utterance. This term is only really necessary in linguistics and in the study of language, and is generally used to refer to any section of speech which is being studied. Sentences cannot be used as they are in written language because the rules of sentences are not always observed. For example, if someone responded to a question by saying "not really," this could hardly be defined as a full sentence. Likewise, a long, rambling description may not lend itself to breaking up into grammatical sentences, so referring to the section as an utterance makes this process easier.
The main argument that takes place regarding the specific definition of the term utterance is whether it refers to the whole spoken "turn" or the words between two pauses. This is more of a semantic argument than one required to use the term correctly, so either definition is suitable for a functional use of the word. A spoken turn can be defined as one person's turn to speak in a conversation; this could be anything from a single word to a ten minute speech. Alternatively, an utterance can be classed as a section of speech between two pauses; this is a more spoken-sentence definition of the term. If the latter definition is accepted, one turn of speech could contain several utterances.