YOU NEED TO READ AND LEARN WHAT YOU SIGN!

Posted on January 17, 2026January 17, 2026 by David Adelstein

You need to read and learn what you sign!

The argument you did not read what you signed is a no-go. It’s not an argument you want to bank on in any way, shape, or form.

Here’s an example. In a recent case, a seller signed an Exclusive Listing Agreement with a real estate broker. The broker brought the seller full value (and eve a higher value) offers. The seller declined all offers and the broker sued the seller for lost commission. An argument the seller raised was that the offers she received were not qualifying offers because they didn’t comply with a document that only she signed regarding instruction to agents submitting an offer.

First, “[i]n Florida, ‘where a broker procures a customer willing, ready, and able to purchase property offered for sale according to the terms of the offer, and the transaction is defeated on account of some fault of the principal, the broker is entitled to his commission, although the transaction is not consummated.’” Carmona Realty Group, LLC v. Fernandez, 51 Fla.L.Weekly D112b (Fla. 3d DCA 2026) (citation omitted).

Second, the instructions to agents that only the seller signed was not part of the Exclusive Listing Agreement. The Exclusive Listing Agreement stated it was the entire agreement. The broker did not sign the instructions. And the Exclusive Listing Agreement did not reference or incorporate the instructions and the instructions did not reference or incorporate the Exclusive Listing Agreement. Carmona Realty Group, supra (“A mere reference to another document is not sufficient to incorporate that other document into a contract, particularly where the incorporating document makes no specific reference that it is ‘subject to’ the collateral document.”) (citation omitted).

Third, the seller acknowledged she didn’t read the Exclusive Listing Agreement. That was a no-no. “‘ A party has a duty to learn and know the contents of an agreement before signing it’, and ‘[a]ny inquiries . . . concerning the ramifications of [the contract] should have been made before signing.’” Carmona Realty Group, supra (citation omitted).

The outcome—the broker was entitled to its commission.

Read your agreement!

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

QUICK NOTE: INCLUDE KEY TIME RELATED FACTS IN CONTRACT TO AVOID AN AMBIGUITY

Posted on December 27, 2025December 27, 2025 by David Adelstein

When drafting or negotiating a contract, it is important to consider key time-related facts. In other words, if there are important provisions dealing with time, you don’t want to leave them undefined as that can create an ambiguity in the contract.

In a recent case dealing with an investment contract, discussed here, that’s exactly what happened. The contract allowed investors to exercise an option to return their equity in exchange for a refund of their investment but the contract didn’t contain an expiration date on when the option must be exercised. The investors tried to exercise the option two years later leading to a dispute as to whether that was a “reasonable time.” This is because the lack of clarity regarding this temporal fact led to a latent ambiguity meaning it was a question of fact as to whether the investors exercising the option two years later was reasonable under the circumstances.

Could this have been avoided? Yes, with an expiration date as to when the option could be exercised, which was a key fact related to time. But even without it, reasonableness does apply and reasonableness is typically a question of fact for others to decide a fact you would prefer, if you could do it over, to bring certainty to through the contract.

TIME TO NEGOTIATE LIMITATION ON REMEDIES AND DAMAGES IS ON THE FRONT END

Posted on December 26, 2025December 26, 2025 by David Adelstein

Remember, when it comes to contracts, the time to negotiate and enter into mutually agreed upon bargains is on the front end. And, if the contract is not negotiable, at least you know that and can make the business decision whether you want to accept the bargains and risks. If you don’t, well, you can walk away. Move onto another deal. If you do, then you make the business decision as to the bargains or risk transfers and accept them moving forward. One of those bargains and risks deals with a limitation on damages and remedies.

In a recent dispute dealing with the sale of an aircraft, there was a provision dealing with the buyer and seller’s remedies in the event of a breach. (Similar to a real estate transaction or other buyer-seller scenario.) “Contract section 10.4(a) stated that if the buyer defaulted, the seller’s “exclusive remedies” were to keep the aircraft and the buyer’s deposit. Section 10.4(b) stated that if the seller defaulted by “fail[ing] to deliver the [aircraft] in accordance with the terms of [the contract],” the buyer’s “sole remedies” were the seller’s reimbursement of the buyer’s inspection costs.” Sky Aviation Holdings, LLC v. Aviation Unlimited, 50 Fla.L.Weekly D2658c (Fla. 4^th DCA 2025). As you can see, there was a limitation on the seller’s damages.

In this case, the seller intentionally breached and notified the buyer that it will refund the deposit and pay the seller’s inspection fees. The seller accepted the limitation on its damages. The buyer didn’t like that and sued the seller arguing that Section 10.4(b) that limited its remedies if the seller breached should be deemed illusory and unenforceable. The trial court agreed and the case proceeded to trial on the buyer’s damages. On appeal, the appellate court reversed remanding the case back to the trial court to award the damages referenced in Section 10.4(b). The appellate court found it presented a reasonable limitation on damages the buyer may recover if the seller breached:

Parties to a contract may agree to limit their respective remedies, and those remedies need not be the same. The contractual provision, however, must be reasonable for a trial court to enforce it. To be reasonable, both parties must have genuine obligations.

***

Here, contract section 10.4 imposed real obligations on both the seller and the buyer.

Sky Aviation Holdings, supra (internal citations omitted).

QUICK NOTE: IF YOU WANT TO RECOVER ATTORNEY’S FEES IN A CONTRACTUAL DISPUTE, INCLUDE A PREVAILING PARTY ATTORNEY’S FEES PROVISION

Posted on November 16, 2025November 16, 2025 by David Adelstein

If you want the ability to recover attorney’s fees in the event of a contractual dispute, include a prevailing party attorney’s fees. Negotiate this point on the front end. Not doing so will hinder your ability to make the argument that you should be entitled to attorney’s fees due to a breach of the contract.

In a recent case, the prevailing party relied on an indemnification provision to create the argument for attorney’s fees even though the action had NOTHING to do with indemnity. This was shot down on appeal as a party can’t use an indemnification provision to create that attorney’s fees argument UNLESS the provision is expressly clear on this point.

This leads us back to the initial point: if attorney’s fees are important to you regarding a contractual dispute, include a clear prevailing party attorney’s provision. Express the intent in the contract.

AN “AGREEMENT TO AGREE” IS NOT A BINDING CONTRACT

Posted on November 13, 2025November 13, 2025 by David Adelstein

A driving issue in a recent dispute was whether a binding contract existed simply through the selection of a proposal in response to a solicitation. Or, was there nothing more than an “agreement to agree,” which does not create a binding contract. There is an important distinction between a binding contract an an “agreement to agree.”

A Community Redevelopment Agency (CRA) issued a Request for Proposals otherwise referred to as an RFP. The RFP specifically stated that the CRA and proposer will be contractually bound only if and when a written contract is executed between the parties. A proposer was notified that it was selected as the winning proposer however a written contract was never executed because the proposer was subsequently disqualified. The proposer filed a lawsuit claiming it was wrongfully disqualified and prevailed. The trial court found it was entitled to attorney’s fees pursuant to a contract that had been formed when the proposer’s proposal was originally accepted.

But was a contract actually formed? The appellate court said “NO!” holding that there was no binding contract simply because the proposer’s proposal was accepted. There was nothing more than an “agreement to agree” which never turned into a binding contract:

“The question of whether the parties intended to form a binding contract is determined by examining the language of the document in question and the surrounding circumstances.” “[I]f the parties prescribe terms to effectuate a binding agreement, such terms are controlling.” Thus, case law is clear that “[w]here the parties intend that there will be no binding contract until the negotiations are reduced to a formal writing, there is no contract until that time.”

The RFP specifically stated that “[t]he CRA and Proposer will be contractually bound only if and when a written contract between the parties is executed by the appropriately authorized officials of the CRA and Proposer.” Based on the plain language of the RFP, neither party was bound, nor was there a binding contract, until a written agreement was executed. Therefore, we find the trial court erred in awarding attorney’s fees based on a contract that was not written or agreed to. Because the parties intended to be bound only when the negotiations were reduced to a formal writing, and a formal writing was never executed, there was no contractual basis to support an award of fees ….Rather, the CRA’s selection of [the proposer] was “nothing more than an ‘agreement to agree,’ ” which is not enforceable.

The CRA’s selection of [the proposer] did not create a contract between the parties. “A request for proposal is used, for example, when the municipality is unable to define the scope of work required completely, or when responses may require subsequent negotiation. As a result, a contract is not typically formed until after the negotiation process.”

Community Redevelopment Agency of the City of West Palm Beach v. Vita Lounge, LLC, 50 Fla.L.Weekly D2448a (Fla. 4^th DCA 2025) (internal citations omitted).

THE PREFATORY WHEREFORE CLAUSES IN AGREEMENTS MATTER

Posted on October 12, 2025October 12, 2025 by David Adelstein

When drafting agreements, the language matters. This is because agreements are not intended to be construed in a vacuum. Sections of an agreement are not to be interpreted in isolation. Agreements are intended to be constructed in the context of the ENTIRE agreement. This is why there is tremendous value in the drafting of the agreement and the negotiation of the agreement. Neglecting this value can bring a large number of headaches, headaches that cost money and lead to undesirable consequences.

When drafting agreements, it has become routine to include prefatory clauses. Sometimes, these are known as the “Wherefore clauses,” that setup up the stage of the agreement before the numbered sections or paragraphs kick in. These Wherefore clauses show up in contracts and settlement agreements, and they matter.

In a recent case, City of Gainesville v. Parkwood Alachua Land Investments, Inc., 2025 WL 2792459 (Fla. 1^st DCA 2025), the issue on appeal was contract interpretation, and particularly the Wherefore clauses. Indeed, this is how the First Ditrict began its opinion:

This is a breach-of-contract case. When we are called to assess a trial court’s enforcement of a contract’s terms, as we are here, the supreme court tells us that we are “bound by the plain meaning of the contract’s text.” One or more provisions in a contract’s text, however, “cannot be viewed in isolation from the full textual context of which they are a part.” Rather, “proper interpretation requires consideration of ‘the entire text, in view of its structure and of the physical and logical relation of its many parts.’ ” This is so because “the goal of interpretation is to arrive at a fair reading of the text by determining the application of the text to given facts on the basis of how a reasonable reader, fully competent in the language, would have understood the text at the time it was issued.” “Context is a primary determinant of meaning.”

At issue here is whether initial paragraphs in the parties’ contract—paragraphs that do not define either party’s rights or obligations—can still be used to provide context governing the meaning of otherwise plain text appearing under the City of Gainesville’s (as the going concern known as Gainesville Regional Utilities, or “GRU”) specified obligation to pay rebate fees to the developer Parkwood Alachua Land Investments, Inc. (“Parkwood”), when certain conditions precedent occur. There was a bench trial, after which the judge applied the operative text literally, without considering the prefatory language for context, and rendered judgment against GRU for money due under the contract. GRU argues a different plain meaning of the text, basing its reading on the clear purpose of the whole contract, which is spelled out by introductory (or prefatory) language. Following the supreme court’s lead regarding “whole text,” or contextual, application of statutory and contractual provisions, we agree with GRU and reverse.

City of Gainesville, supra (internal citations omitted.)

As you can tell from the start of this opinion, the First District reversed because the trial court did not apply meaning or application to the Wherefore clauses. The contract itself, here, does not matter. What matters is that contract interpretation requires a review of the entire contract, not just sections in isolation. See City of Gainesville, supra (“Our objective ‘is to ascertain the meaning and intent of the parties as expressed in the language used.” As mentioned in the beginning, when we do so, we cannot read a textual provision in isolation-something the trial court erroneously did here.’) (citation omitted). Here, the trial court did not consider the Wherefore clauses, and this was a big no-no the First District:

In construing the [Agreement], the trial judge zeroed in on paragraphs nine and ten and expressly read them without considering the prefatory text or the circumstances surrounding the contract’s execution. The judge explained in her order that the prefatory text “may not be relied upon if they will cause ambiguity in an otherwise unambiguous contract.” This approach incorrectly treated the question of ambiguity as strictly binary—so making the decision whether to look at any other text in the contract at all wholly dependent on whether the text in question, by itself, is ambiguous in the first place. Construction canons are not to operate this way. “Viewed properly as rules of thumb or guides to interpretation, rather than as inflexible rules,” these canons “can aid the interpretive process from beginning to end,” so “[i]t would be a mistake to think that … interpreters [must] make a threshold determination of whether a term has a ‘plain’ or ‘clear’ meaning in isolation, without considering the statutory context and without the aid of whatever canons might shed light on the interpretive issues in dispute.”

City of Gainesville, supra (internal citations omitted).

Remember, the language in contracts matter, including language uses in the prefatory Wherefore clauses.

QUICK NOTE: CHOICE OF LAW PROVISIONS

Posted on August 9, 2025August 9, 2025 by David Adelstein

It is common for construction contracts to include a choice-of-law provision or language. This is language that says the contract is to governed under the laws of the state of Florida (by way of example). Pick any jurisdiction. There may be other language in the provision, but the gist is that if there is a dispute arising under the agreement, the laws of the state designated in the choice-of-law provision will apply.

For example, you can have an agreement in Florida with a vendor but that agreement includes a choice-of-law provision that says the state of Virginia applies. This is because the vendor may be based in Virginia and the agreement was based on Virginia law.

However, a choice-of-law provision can be waived if it is not timely raised in a lawsuit. So, if you are in a dispute in Florida under an agreement that says Virginia law applies, the application of Virginia law can be waived if it is not raised. This is an important consideration because the designated state may contain more favorable legal principles on a given issue. This was the circumstance discussed here where the Virginia choice-of-law provision was waived because it was not timely raised. Had it been timely raised, it would have benefited a party on an issue dealing with attorney’s fees which is treated differently in Florida.

A CONTRACT IS A CONTRACT: RELEASES AND CHANGE ORDERS / BILATERAL MODIFICATIONS ARE CONSTRUED AS CONTRACTS

Posted on April 6, 2025April 6, 2025 by David Adelstein

A contract is a contract. It should say what it means and means what it says. A release is construed like a contract. A change order or bilateral modification is construed like a contract. The decision out of the United States Court of Federal Claims, B.L. Harbert International, LLC v. US, 2025 WL 914388 (Fed.Cl. 2025), serves as a case on point.

In this case, the contractor had a claim related to a bilateral modification (i.e., change order #1) on a federal project which included a two-month extension of time to complete the contractor’s work. The modification stated the contractor and the contractor’s subcontractors waived the right to seek compensation for any other delays relating to the work. “When a contractor signs a general release, it is barred from seeking damages for the events connected to and contemplated by the release.” B.L. Harbert International, supra, at *4. Thus, the contractor’s claims related to this modification were waived.

The contractor also had claims related to two other bilateral modifications (i.e., change orders #2 and #3). The modification #3 left open any time extension due to the changed work and costs associated with the time extension because it was uncertain whether such work would result in a delay. However, the work did NOT cause a delay. The contractor accelerated its subcontractor and had the work completed ahead of schedule. The contractor claimed it was entitled to the additional costs associated with the acceleration. But the acceleration is NOT a time extension or delay. “[The contractor] could have negotiated with the Corps to cover acceleration costs that would prevent any further extensions of time, but it is too late to make that change to the contract after the fact.” B.L. Harbert, supra, at #4. In other words, modification #3 resolved the contractor’s costs for additional work other than a time extension and costs associated with a time extension. But a time extension was never needed. Thus, the contractor waived any costs for acceleration.

The contractor made another argument to counter the specific language in the modifications. It argued mutual mistake.

The contractor argued that the parties understood that the modifications did not cover the contractor’s additional costs as reflected in letters the contractor sent the government prior to the modifications. Therefore, the contractor claimed there was no meeting of the minds if the government’s position is different.

Under universal contract interpretation and each executed modification is a contract, “when contract provisions are clear and unambiguous, they must be given their plain and ordinary meaning.” B.L. Harbert, supra, at *5 (internal quotation and citated omitted). The modifications were clear and unambiguous.

Next, the contractor never presented its request for contract reformation due to mutual mistake to the government’s contracting officer, and the court can only review claims presented and certified to the contracting officer under the Contract Disputes Act. Regardless, the contractor couldn’t satisfy the requirements of mutual mistake. “To show a mutual mistake, [the contractor] must meet four elements by clear and convincing evidence, including demonstrating that ‘the parties to the contract were mistaken in their belief regarding a fact … [and] the contract did not put the risk of the mistake on the party seeking reformation.’” B.L. Harbert International, LLC, supra, at *5 (citation omitted). The contractor had to show that “the parties shared a mutual mistake,” which it could not factually demonstrate. See id.

FOLLOW THE DISPUTE RESOLUTION PROVISION(S) IN YOUR CONTRACT

Posted on March 9, 2025March 9, 2025 by David Adelstein

When you are in a dispute, one of the first things you want to look at is the dispute resolution provision(s) in your contract. What does the provision(s) say? (There could be more than one provision.) Do you need to mediate first? Are disputes decided via arbitration or litigation? Is there a venue provision? Is there a waiver of jury trial? Is there an attorney’s fees provision? Is there a choice of law provision? You want to know this BEFORE you proceed with escalating the dispute. Not following the dispute resolution provision(s) can have consequences. Below is an example.

In Pesantes v. Kelley, 50 Fla. L. Weekly D519a (Fla. 3d DCA 2025), a residential buyer and residential seller were in a dispute. The parties entered into an as-is residential contract. The contract included a dispute resolution provision that required the parties to mediate their disputes and if they were unable to settle through mediation, then the parties could litigate their dispute. There was also a prevailing party attorney’s fees provision that stated, “In any litigation permitted by this Contract, the prevailing party shall be entitled to recover from the non-prevailing party costs and fees, including reasonable attorney’s fees, incurred in conducting the litigation.” Pesantes, supra.

The buyer filed a lawsuit against the seller for negligence without complying with the pre-suit mediation requirement. The seller did not move to compel mediation. The seller, instead, responded claiming the dispute was governed by the contact and demanded prevailing party attorney’s fees per the contract. Months later, the buyer dismissed the lawsuit and the seller moved for prevailing party attorney’s fees. The trial court denied the motion. The appellate court confirmed based on the language in the dispute resolution provision(s):

[T]he right to prevailing party attorney’s fees in litigation of a claim ‘arising out’ the Contract is triggered, (i.e., ‘permitted’) only where the parties have participated in the pre-suit mediation required by paragraph 16 and have reached an impasse (i.e., “not settled’) at such pre-suit mediation.

In other words, the Contract specifically limits fee entitlement to the prevailing party in lawsuits ‘permitted by’ the Contract. Had the Contract’s drafters intended for a broader application of fee entitlement – that is, for a prevailing party in any lawsuit ‘arising out’ of the Contract to be entitled to fees—the drafters would have included the same, broad “arising out of’ language that the drafters employed in paragraph 16. They did not, and this Court is powerless to rewrite the parties’ agreement.

Pesantes, supra (internal citations omitted).

KEEP AN EYE OUT ON WHAT YOUR INSURANCE POLICY AND CONTRACT SAYS

Posted on January 25, 2025January 25, 2025 by David Adelstein

There is a very good reason the contract requires the party providing a service (e.g., subcontractor) to name the paying party (e.g., general contractor) as an additional insured under its liability policies (e.g., CGL policy) on a primary and non-contributory basis.

There is also a very good reason why you, as an insured, should read the contracts you sign with the party providing a service for you.

In other words, keep an eye out on what your insurance policy says and what your contract says! This is an ABSOLUTE!!

If you want to know the good reasons, look no further to the recent case of Colony Insurance Co. v. Titan Restoration Construction, Inc., 2025 WL 45160 (Fla. 4^th DCA 2025). In this case, a general contractor’s CGL policy contained an endorsement that stated there would be no coverage UNLESS the general and subcontractor executed an agreement containing, “A requirement for the [subcontractor] to name the insured [general contractor] as an additional insured under their Commercial General Liability policy on a primary and non-contributory basis in favor of the insured [general contractor].” Colony Insurance, supra. The general contractor hired a roofing subcontractor. There was no requirement for the roofing subcontractor to name the general contractor as an additional insured on a primary and noncontributory basis. Also, the proposal the general contractor signed contained a disclaimer from the roofing subcontractor that the subcontractor “will not be held responsible for water damage to the exterior or the interior of the premises.”

Naturally, the roof installed by the roofing subcontractor leaked causing water damage. The general contractor submitted a claim to its CGL insurer. Its CGL insurer denied coverage because the subcontractor had NOT added the general contractor as an additional insured on a primary and noncontributory basis to its CGL policy. In other words, per the endorsement, there was no coverage because the general contractor did not comply by requiring its subcontractor to name it as an additional insured on a primary and noncontributory basis.

A coverage dispute between the general contractor and its CGL insurer ensued. On appeal, there are key points decided by the appellate court:

If an endorsement is in conflict with the body of an insurance policy, the endorsement will control. Colony Insurance, supra(citation omitted). This is important because the general contractor argued the endorsement conflicted with the body of the policy and, thus, the conflict should be construed against the insurer. However, this was shot down because the endorsement controls.

The general contractor’s CGL policy required the general contractor to have been added as an additional insured under its roofing subcontractor’s policy on a primary and noncontributory basis. The general contractor failed to comply with this endorsement and, thus, there was no coverage.

Separately, the proposal which was part of the contract between the general contractor and roofing subcontractor included a disclaimer such that the roofing subcontractor was disclaimed from liability for water damage. Regardless, the general contractor contractually agreed that the subcontractor was not responsible for water damage. Ouch!