Contract Review Is Critically Important

A case recently decided by Florida’s Fourth District Court of Appeal highlights the importance of comprehensive contract review. Having a contract reviewed by an attorney will help protect your business from future headaches. If your company is considering entering into a contract, you should contact an experienced West Palm Beach business litigation attorney.

The Case

Lambert Brothers, a Florida company, was hired to work on a toll plaza construction project. Lambert Brothers then subcontracted a portion of the job to a company called Mid-Park. The construction of the toll plaza itself went smoothly, but a dispute arose over which company was responsible for certain tax payments. Florida charged $77,000 in sales and use taxes in relation to the specific portion of the construction that Mid-Park was contracted to work on. Lambert Brothers contended that the taxes were part of contract price and that responsibility for those taxes fell onto Mid-Park. In contrast, Mid-Park countered that the taxes were not included in the contract. The taxes may have been triggered by Mid-Park’s specific portion of the project, but the responsibility for them fell onto Lambert Brothers as the project’s primary contractor. The court did not accept the argument from Mid-Park and ruled in favor of Lambert Brothers.

Contract Review Will Help Avoid Disputes

This case is important because it demonstrates just how easy it is for business contract disputes to arise. Issues that may have been foreseeable during a review get missed only to arise later and force litigation. Complexity is involved in almost every significant business agreement. A detailed contract review by an experienced business litigation attorney will help ensure that problem areas are identified early. This will dramatically reduce the risk of costly contract dispute. Key contract considerations include:

• Elimination ambiguity: A clear contract, fully understood by both parties, is in everyone’s best interests. Contract ambiguity can arise in so many ways, from certain terms or phrases to issues that were simply left unaddressed. A qualified attorney will review a contract and look for issues that need to be clarified. In the Lambert Brothers case, the tax issue was simply left unaddressed. It is likely that both parties simply assumed the other would be taking care of the tax payment. An experienced contract review attorney knows how to find these issues so that they are addressed before a contract is signed.
• Establishment of the dispute process: Unfortunately, it is impossible to completely eliminate the risk of a contract dispute. It is incredibly important to have a clear dispute resolution process within the contract. For example. your business contract should include a choice of law provision, so it is clear as to which law will govern contract. Further, you may want to include an arbitration or mediation provision to help resolve any future disputes more smoothly.
• Protection of your business from undue from legal fees: All business contracts should include specific provisions detailing the responsibility for any potential future attorneys’ fees.

Contact An Experienced West Palm Beach Business Litigation Attorney

Every company will benefit from attorney review of their business contracts. The experienced legal team at Pike & Lustig, LLP is committed to providing careful and comprehensive review of any business contract. Contact our West Palm Beach Office at (561) 855-7575 today to schedule a free legal consultation.