The Importance of Contract Language

Posted on: November 13, 2012

The language used in a contract is what governs the relationship between the contracting parties. In a lawsuit, the court looks within the four corners of the contract to determine the rights and obligations of each party. Outside evidence can be used in limited circumstances, such as to explain particular terms of the contract. The following case highlights the importance of contract language.

In Breazeale v. GDC View, LLC, 79 So. 3d 96 (Fla. 1st DCA 2012), Sommai Breazeale (the “Buyer”) entered into a contract to purchase a condominium from GDC View, LLC (“GDC”), the developer and seller of the condominium. The condominium was not constructed when the purchase contract was executed. The purchase contract provided that the unit would be completed within two years of the date of the contract and in no event later than May 1, 2007. The purchase contract also provided that the period for completion of the unit could be extended beyond two years if certain delays occurred. The condominium was not completed within two years of the contract. In April 2007, GDC gave the Buyer notice that it was ready to close between the dates of May 1 and May 21, 2007, but the Buyer never appeared for a closing. On May 4, the Buyer advised GDC in writing of her decision to rescind the contract. The Buyer sought a refund of the deposit and return of the letter of credit. GDC refused to grant a refund and, instead, filed suit for breach of the purchase contract. The Buyer filed a counterclaim also for breach of the purchase contract. The case was decided in GDC’s favor, and the Buyer appealed.

The Court looked to Florida Statute section 718.104(4)(e), which set forth two requirements before a completed condominium in a substantially completed building can be conveyed, and the language of the recorded Declaration of Condominium, which outlines the rights and obligations of the developer and the condominium owner, and agreed with the Buyer. The Court found that the condominium could not have been conveyed by May 1, 2007 because it could not have been deemed complete. Despite this finding, the result was affirmed because the purchase contract allowed for the extension of the period for completing the condominium if certain delays occurred. These delays extended the completion deadline to June 28, 2007, a date beyond the June 11, 2007 issuance of certificate of occupancy.

If you are a buyer or seller of commercial or residential property and seek assistance with your real estate contracts, contact the real estate attorneys at Schecter Law today at (954) 779-7009 to address your real estate contract concerns.