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How Ambiguity in Your Contractual Document Can Alter the Course of Florida Litigation that Comes out of That Agreement

The Merriam-Webster dictionary defines “at cross-purposes” as an idiom that means “in a way that causes confusion or failure because people are working or talking with different goals or purposes.” This problem of talking or working at cross-purposes occurs in all walks of life, including business. The potential for two sides, whether intentionally or unintentionally, to become at cross-purposes with one another – often without even realizing it – is another example of why meticulous drafting and the right legal counsel matter so much in the commercial contracting process. Whether you’re consummating a new business or working out a mediation agreement, your skilled South Florida commercial contract attorney can help you make sure you get a final agreement that is clear and unambiguous, and that you rectify any problems created by confusion or talking at cross-purposes.

The importance of having an agreement that was drafted in sufficient detail so as to avoid confusion and ambiguity was on display in a recent case in South Florida. A Miami-based motor club signed a servicer’s agreement with a Coconut Grove-based marketing entity. The arrangement called for the motor club to provide roadside assistance services to truckers and trucking companies, and for the marketer to sell those services as membership plans.

A dispute arose over certain fees that, according to the motor club, the marketer had retained wrongfully. After mediation, the two sides worked out (and signed) an agreement. That document said in Paragraph 1a that the motor club was entitled to receive a sum of $350,000 from the marketer. Later on, the document stated that the motor club was to receive “the Settlement Sum and the amount referenced in paragraph 1a above.”

That language became the seed of a second dispute. The marketer argued that the $350,000 amount was the settlement sum, and the entirety of what it agreed in mediation to pay. The motor club asserted that the settlement sum and the $350,000 were two different things and that the mediation agreement was ambiguous.

In Florida, an ambiguity that appears on the face of a contract is called a “patent ambiguity.” That was what had occurred in this case, according to the Court of Appeal. In the opinion of the court, the plain language of the agreement contained two amounts: a “Settlement Sum,” an amount for which was never stated, and “the amount referenced in paragraph 1a,” which was the $350,000 amount. With that wording, it was impossible to say that the agreement unambiguously supported with the marketer’s argument.

Ambiguity in your agreement may mean you can put on more evidence at trial

When a contract is unambiguous, the law forbids introducing at trial what’s called “parol evidence,” which is proof your prior (or contemporaneous) negotiations or agreement that would contradict what is in “black and white” on the contract. However, when a contract is vague or ambiguous, then that evidence can be put on the record. In this case, the contractual ambiguity meant that the motor club was entitled to a new trial – one in which it would be permitted to use its parol evidence that supported its interpretation of the contract’s terms.

Sometimes in business, you may think that you have a meeting of the minds with the other side, when you really don’t. A carefully and properly worded contract document can be essential, not only in protecting your rights and interests, but also in ironing out any confusion and misunderstandings between the two sides. For the legal help you need in negotiating the right commercial agreement, and in getting that agreement converted into an unambiguous and enforceable written document, call upon the skilled South Florida commercial contract attorneys at Stok Kon + Braverman. Our team has been providing businesses and businesspeople with effective legal representation for many years, and is ready to get to work for you.

Contact us online or by calling (954) 237-1777 to schedule your consultation.

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