How Ambiguous Terms Can Affect Your Rights Under a Florida Contract

Florida business contracts are often long, complex documents that contain multiple provisions designed to define the rights and obligations of the parties involved. Even the most carefully drafted contract, however, may still contain certain “latent ambiguities.” That is to say, there may be terms in the deal susceptible to more than one interpretation. This, in turn, can lead to litigation if something goes wrong with the deal.

Was 2 Years Too Long to Wait Before Demanding a $1.5 Million Refund?

A recent decision from the Florida Fourth District Court of Appeal, New Leaf Assets, LLC v. Jerue, provides a good example of this problem. This case dealt with an investment agreement. Two investors signed a contract to invest $1.5 million in a limited liability company (LLC) in exchange for a 7.5 percent membership interest.

As relevant to this case, the agreement provided, “Six months after the payment of the [investors’] contribution,” the investors had the option to either keep their membership interest or return it for a full refund of the original $1.5 million investment (without interest). Another LLC member acted as personal guarantor for this provision.

More than two years after the investors signed the contract and paid their $1.5 million contribution, one of them called the personal guarantor to demand a refund. The guarantor replied that he’d already re-invested the contribution and refused to return the money. This prompted the investors to file a breach of contract lawsuit.

Before a Florida circuit court judge, the LLC and the guarantor argued that the investors failed to exercise their option within a “reasonable time.” The investors noted the contract only said they had a right to demand a refund starting six months after they made the contribution. The contract never specified any end-date for this refund provision. The defendants maintained that the judge should infer the existence of a “reasonable time” requirement since the contract did not provide such an end-date.

The trial judge agreed with the investors and granted their motion for summary judgment on their breach of contract claim. On appeal, the Fourth District reversed. The appellate court said the “latent ambiguity” in the contract actually required the trial court to “impose a ‘reasonable time’ for performance, notwithstanding the definiteness of the other contractual performance.”

Now, what qualified as a “reasonable time” would depend on the specific facts of the case. In other words, that was an issue for a jury to decide. The trial judge erred by summarily ruling in favor of the plaintiffs before conducting such a trial.

Contact a Bradenton Business Litigation Lawyer Today

When it comes to exercising your rights under a contract, or Florida law for that matter, it is always best to be proactive. Delaying action can often mean forfeiting valuable legal rights. So if you are involved in a dispute involving a contract and need legal advice from a qualified Bradenton business litigation attorney, contact Suncoast Civil Law today at 941-366-1800 to schedule a confidential case evaluation.

Source:

flcourts-media.flcourts.gov/content/download/2482744/opinion/Opinion_2025-0048.pdf