Citation. 262 Fed.Appx. 498,2008 U.S. App.
Law Students: Don’t know your Studybuddy Pro login? Register here
Brief Fact Summary.
Plaintiff Joyner leased property to Defendant Adams. The lease provided for suspension of a rent increase for a specified time if there was complete development of the subdivision during that time.
Synopsis of Rule of Law.
The maxim for construing an agreement against the drafter applies to contract construction, but not contract interpretation.
Plaintiff leased property to Brown. The property was to be subdivided and the rent would increase over the term of the lease. In 1975, Brown had some financial difficulties so Defendant was substituted. The rent increase was suspended for a time to allow Defendant to subdivide the property. Defendant was to complete the subdivision during the suspension of the rate increase. If the subdivision was not completed, Defendant would be liable for the rent increases that would have occurred during the suspension. At the end of the suspension, all of the lots but one had buildings and separate lot leases. The remaining lot had been graded, had water and sewer lines, and all driveways and roads leading to the lot were built. The parties disagree as to whether Defendant met the subdivision requirement of completed development for suspending the lease.
Should the contract be construed against Plaintiff as the drafter?
No. The contract should not be construed against Plaintiff as the drafter.
The lower court came to its decision by applying the maxim of construing ambiguous terms against the drafter. The Court states that this is a rule of contract construction and does not apply to interpretation. The Court further notes that it is unclear whether Plaintiff was in fact the drafter of the provision.
The Court instructs that on remand, the trial court should apply Plaintiff’s meaning if Defendant had reason to know of Plaintiff’s meaning and Plaintiff did not have reason to know of Defendant’s meaning. If such a finding is not made, the Court instructs the trial court that Plaintiff’s claim must fail.
In the present case, the Court held that the maxim construing a contract provision against the drafter was not properly applied for two reasons. First, the maxim applies to contract construction, not contract interpretation. Second, it is unclear whether Plaintiff actually drafted the provision.