Contract Interpretation Rules for Non-compete/Restrictive Covenant AgreementsSeptember 23, 2014
The Case of the Clear and Unambiguous ContractDecember 2, 2014
If you want to limit the remedies available to you in the event a contract is breached, you better be sure that your contract specifically limits those remedies. The recent case of Regents Park Investments, LLC v. KAI Properties, Ltd., 39 Fla. L. Weekly D2322 (Fla. 3d DCA November 5, 2014) proves this point. In Regents Park Investments, a purchaser brought suit against the seller in a real estate transaction for specific performance. The trial court dismissed the claim presumably on the basis that an action for “specific performance” was not enumerated in the contract. The appellate court reversed and stated “Because the default provision detailed in the contract for purchase and sale does not limit the remedies available to the purchaser in the event of a default by the seller, the court below erred in concluding the an action for specific performance could not be asserted.” The point is that the breaching party could have avoided a claim for specific performance if the contract specifically precluded that remedy. Put another way, the breaching party should not assume it can avoid a cause of action unless the contract specifically limited the rights of the non-breaching party. As I’ve stated before in these blogs, it all comes down to drafting clear, concise and specific contracts.