If you need more of a reason to have contracts with clear and definite terms, this case is it. This case exemplifies what can happen if the contract, not only does not have clear and definite terms, but contains a patent ambiguity. The contract will be deemed unenforceable which will make one of the contracting parties very unhappy!
In Bowein v. Sherman, 48 Fla.L.Weekly D2208a (Fla. 6th DCA 2023), the buyer and seller entered into a real estate transaction. The transaction was for $2 Million. The purchase-and-sale agreement included the address and legal description of a parcel to be sold. However, there was a section in the agreement called “Other Terms and Conditions” which identified that the offer was actually for four properties that were being sold by the seller. When it came to closing time, the seller refused to close because the seller disputed that the $2 Million purchase price was for all four of his properties. The buyer sued the seller for specific performance to force the sale which the trial court agreed in favor of the buyer. However, the appellate court did not.
First, the appellate court held that “[t]he equitable remedy of specific performance may be granted only where the parties have actually entered into a definite and certain agreement.” Bowein, supra (quotation and citation omitted).
Next, the appellate court found there was NOT a definite and certain agreement because the contract contained a patent ambiguity. “[A] patent ambiguity is that which appears on the face of the instrument and arises from the use of defective, obscure, or insensible language.” Bowein, supra (quotation and citation omitted). Here, the appellate court found that “[t]he different legal descriptions and addresses in different parts of the sales contract on its face lead us to conclude a patent ambiguity exists.” Id.
Lastly, the appellate court held a patent ambiguity cannot be used through parol evidence. The contract is basically dead, i.e., unenforceable, because “a trial court cannot choose one contradictory provision of a contract over another without impermissibly rewriting the contract.” Bowein, supra.
Here the patent ambiguity was that the “Other Terms and Conditions” included three additional properties that were not identified on the first page of the contract as to the property to be sold. Had the parties, on the first page, identified “see Other Terms and Conditions” or clarified that the property to be sold was subject to the “Other Terms and Conditions,” there is no patent ambiguity. It was just a matter of CLEARLY identifying that the $2 Million sale price was not just for the property identified, but for the property identified plus the properties subject to the “Other Terms and Conditions.”
It seems that the seller had seller’s remorse. Because the real estate contract was likely done electronically and filled out electronically, the first page only had space for one parcel. The buyer figured he could identify the other parcels in the “Other Terms and Conditions” and perhaps could have made this clearer. Because there could have been better clarity as to what the $2 Million was for, the appellate court just found there to be a patent ambiguity based on the conflict between the first page of the contract with the “Other Terms and Conditions.” Was there really a patent ambiguity? Yeah, I do not know here because when the “Other Terms and Conditions” state that the offer was for the four properties, it seems clear the buyer was making the $2 Million offer for the four properties…but it could have been clearer which was the seller’s get out jail card on the transaction.
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.