If you find yourself embroiled in a commercial contract dispute, it helps to understand how the courts will go about interpreting your agreement. The law has created certain rules that set the standard for how judges should interpret contracts. For example, if an agreement provision mentions some, but not all members of particular class or group of items, then the law says that courts should interpret that language as carrying with it the definitive implication that those class or group items not included were intentionally excluded. For more about this and other rules of contract interpretation and how they may benefit you in your breach of contract or wrongful termination lawsuit, be sure you have retained an experienced Florida business litigation attorney to represent your interests.
A recent case from Miami-Dade County was a real-life illustration of this principle. The origin of the case was a multi-million-dollar contract where the Miami-Dade County Expressway Authority (MDX) retained a Dallas-area consultant to provide a toll-by-plate system for the county’s toll roads. The authority made many assertions regarding the failing project, including accusing the contractor of intentionally underbidding the project and lying about its ability to do the job.
The contractor, however, believed that MDX was the party engaging in misconduct and sued. The contractor alleged that the authority breached the contract. The authority subsequently terminated the contract, leading the contractor to add a claim for wrongful termination onto its already pending lawsuit.
The case made it to a bench trial, where the judge firmly sided with the contractor. MDX, the judge decided, breached the agreement by failing to follow an agreed-upon schedule and deadlines. The judge also determined that the authority wrongfully terminated the contract because, at the time of termination, the contractor’s system was in “material compliance” and the contractor was “substantially performing its contractual obligations.”
The court assessed the contractor’s damages to be more than $53 million. The authority appealed, but the appeals court in Miami upheld the lower court’s decision.
MDX argued to the appeals court that the trial judge had misinterpreted the contract and allowed the contractor to pursue litigation in violation of the contract’s dispute resolution procedures clause.
‘Expressio unius est exclusio alterius’
The appeals rejected this argument because there was “no singular provision requiring mandatory dispute resolution for all claims arising under the contract.” The flaw in the authority’s argument – and the key to the contractor’s $53 million success – was something that, expressed in Latin, says: expressio unius est exclusio alterius. What this means in English is that, when one seeks to interpret a statute or a contract, and the statute or agreement in question lists one or more (but not all) items out of a certain group or class, then the statute or contract should be interpreted as intentionally excluding all of the other members of that group or class that were not mentioned.
The sections of the contract that MDX relied upon in arguing for alternate dispute resolution were ones that dealt specifically with scope changes and disputes arising out of scope changes or scope change requests. However, the trial judge in MDX’s case concluded that the work in dispute in this trial was “within the scope of work contemplated by the” contract, and not a scope change. Because the dispute resolution clause explicitly stated that work arising out of scope changes was included, then the law required interpreting it as specifically and intentionally excluding work arising out of the original contract scope. That meant that the clause didn’t apply, and the authority’s contractual interpretation argument failed.
If you become involved in a contract dispute that turns into commercial litigation, you need the right counsel that understands the law’s rules of contract interpretation and how to use them to your maximum advantage to protect your business interests. Rely on the experienced South Florida commercial litigation attorneys at Stok Kon + Braverman for that kind of strong and effective representation in your case.
Contact us online or by calling (954) 237-1777 to schedule your consultation and find out how this firm can help you.