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Monday, June 4, 2012

Contracts: Courts should not be called upon to function as a backstop for sloppy drafting!

Under California law, contracts are interpreted by an objective standard: the words of the contract control over the party's subjective intentions. This is relevant in all cases, including forum and jurisdiction provisions.  While in a great many situations forum and jurisdiction are undifferentiated, California courts recently observed that:

(a) there is a difference;

(b) a court should not be called upon to function as a backstop for sloppy contract drafting; and

(c) a judge should not have to spend court time sorting out the meanings and applications of common legal terms. 

The lesson, needless to say, is that proper contract drafting is an art that should never be underestimated and competent counsel shall always be involved.

Mauricio Leon de la Barra is an international law attorney licensed to practice law in Mexico and California, and has more than 15 years of experience representing clients in business and real estate transactions and litigation involving international, U.S. and Mexican laws.