Business LawBusiness LitigationContracts

Contracts is Contracts

Say what you mean, and mean what you say.

Lucky Number Slevin (2006)

What happens when a contract has a provision in it that one party no longer likes or wants to honor? Can it still be enforced?

Generally speaking, the answer is yes in Wisconsin. The courts follow the four corners rule and will enforce the letter of the agreement as it is written (within its four-corners) unless it is unclear as to its meaning.

When the terms of a contract are plain and unambiguous, the court construes the contract as it stands.  A court will “[p]resume the parties’ intent is evidenced by the words they chose, if those words are unambiguous.”

Kernz v. J.L. French Corp., 266 Wis.2d 124, 134, 667 N.W.2d 751 (2003). 

However, ambiguity is more than just the parties disagreeing on what the contract means or how it should be applied. Wisconsin courts also defer to what people in the same industry would understand or apply as meaning to the contract, looking to how “it would be understood by persons in the business to which the contract relates.” Columbia Propane, L.P. v. Wisconsin Gas Co., 261 Wis.2d 70, 85, 661 N.W.2d 776 (2003).

If, however, a Court determines that a contractual provision is ambiguous, two rules comes into play, the court can then go outside the four-corners of the contract to the parties other interactions to determine the meaning of the contract, and any ambiguities that cannot be resolved, are construed against the drafter of the agreement.

As one can imagine, these cases are very fact specific and depend on a what the language at issue is in the contract as well as other language in the contract (is there an integration clause which prohibits looking outside the four-corners of the agreement, is it clear who drafted the agreement if it was the result of multiple revisions and negotations, etc.)

If you find yourself in a situation where a dispute has arisen about what exactly a contract provision means, or if one party is trying to get out of a particular provision, we can help. We have litigated these issues in the past and we are always willing to look at alternative fee structures (contingent fees or Flat Fees).