SigalebLAWg Dispute About Meaning of Contract Terms Has Lesson For Us All

Dispute About Meaning of Contract Terms Has Lesson For Us All

I wanted to take a break from Bears misery to discuss a recent Illinois Supreme Court opinion: Thompson v. Gordon [You can read the opinon at http://www.state.il.us/court/Opinions/SupremeCourt/2011/January/110066.pdf. Though not the exact issue involved, my lesson from this case is to make sure you understand all terms of a contract before you sign it. If you have any questions about the meaning of a phrase, do not assume you will solve it later, or it will all be worked out. Clarify everything you are agreeing to before you put pen to paper. Of course, I tend to take that lesson from all contract disputes.

In Thompson, the defendant was an engineering company who had a subcontract for services connected with the development of Gurnee Mills Mall (this was in 1991). Defendant, in part, had to replace the bridge deck for Grand Avenue (Route 132) over I-94, which it did. Six years later, a car lost control on that Grand Avenue bridge, jumped the median, flipped, and landed on the plaintiff's car, severely injuring her and killing her family members. The issue was whether the defendant, when it replaced the bridge deck, was negligent in failing to also design a "Jersey barrier" on the bridge that allegedly would have prevented the crash. The defendant claimed it had no duty to analyze or design any median barriers, and that its contractual job was merely to "replace" what was already there.

The trial court gave the defendant summary judgment, but the Appellate Court reversed and would have allowed the case to proceed. The Illinois Supreme Court reversed again and gave the judgment to the defendant, noting that "replace" was unambiguous and clearly defined the defendant's duty, which did not involve designing and improving the bridge deck. Three points to note:

  1. When contract terms are unambiguous, they are given their common meaning without outside evidence;
  2. When they are ambiguous (subject to more than one meaning), then you need additional evidence to figure out what the parties to the contract meant;
  3. Just because parties disagree as to a term's meaning does not make it ambiguous.

 

Of course, the plaintiff in the case was not a party to the engineering subcontract at issue, and did not have an opportunity (or reason) to negotiate the terms of the subcontract. But many people seeking the interpretation of contract terms are parties to the contract, and did negotiate and/or agree to its terms. Many, many times I have had folks consult with me with their disputes about contracts they wrote themselves, or (even worse) about oral handshake agreements with someone they thought they knew and trusted. They always agree with me that, in hindsight, entering into a legal agreement without having an attorney draft, or even review, the agreement was perhaps not the wisest move. If disputes such as Thompson occur, where the interpretation of terms written by attorneys can cause so much conflict, just figure the damage people can do when acting on their own.