During my introduction to contract drafting last week, I reviewed with my students a contracts case that hinged on the meaning of a common, four-letter word: “sale.”
Many lawyers wouldn’t think to look up “sale” in a dictionary because everyone “knows” what it means.
That seemingly clear word caused a $7.5 million employment-contract dispute that ended up in a Florida appellate court. Yes, word choice can really matter.
In Langford v. Paravant, a retired military officer took a job with Paravant, a company pursuing a $300 million contract with TRW (a large government contractor). Mr, Langford was hired after Paravant had started negotiating with TRW, and his duties included sealing the deal. Langford v. Paravant, Inc., 912 So. 2d 359 (Fla. Dist. Ct. App. 2005)
Mr. Langford spent 17 months working to ensure that Paravant got the contract. After the deal was sealed, Paravant fired Mr. Langford and refused to pay him the 2.5% commission set forth in his employment contract (2.5% of $300 million = $7.5 million).
Basically, Paravant argued (1) that it would have owed Mr. Langford the commission only if he had made a “sale” (i.e., brought TRW to Paravant) and (2) that he did not make a “sale,” as the two companies had started the proposal process before Paravant hired Mr. Langford.
Based partly on Webster’s definition of “sale” (“operations and activities in promoting and selling goods and services”), the court found that arguably a “sale” had occurred as a result of Mr. Langford’s efforts—even if he had not initiated the negotiations with TRW.
Courts follow similar processes when construing contracts and legislation. That said, below are a few “take aways” that I emphasized to my students:
(1) Don’t assume that you know the meaning of key words in a contract or legislation (words that trigger or have a significant impact on a duty or right).
(2) Slow down and look up key words in a dictionary or two: many courts have consulted dictionaries when construing words in contracts and legislation.
(3) If dictionary definitions differ from how you, as a contract or legislation drafter, want a court to interpret a word, stipulate its meaning (i.e., carefully draft a definition) in the contract or legislation.
(4) Even if you are reading already-existing contracts or legislation in order to challenge or enforce them, slow down and investigate the meaning of key words because ambiguous usage can benefit your client.
(5) Failure to critically analyze words can bring consequences to lawyers, given our professional responsibilities: e.g., loss of client or job, malpractice suits, or Bar grievances filed by harmed clients.
I will continue to share examples from my research files re: elements of writing that have caused legal problems.