OC Dispute Resolution Services, LLC

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When is a Contract Considered "Mutually Drafted"?

The average person enters into many different types of contracts in their lifetime. Whether its signing up for a credit card, buying a car, agreeing to an extended protection plan on a television, or signing an employment agreement, chances are you have no input in the language of the contract.

If, however, you have input in revising, re-wording, changing, or amending a term within the agreement, the contract may be deemed “mutually drafted" by a court in the event the contract is breached. This designation can be significant in a contract dispute.

Ambiguities Construed Against Drafter

The Latin term contra proferentem is a contract principle that provides that an ambiguous or uncertain term in a contract will be construed against the party that caused the uncertainty to exist. Civ. Code§ 1654. Ambiguities are contract language that is difficult to comprehend or distinguish. Royal Neckwear Co. v. Century City, Inc., 205 Cal.App.3d 1146, 1153 (1988).

In a practical sense, the person that “caused the uncertainty to exist" is the person that drafted the agreement. Thus, the general rule is that ambiguities in the drafting of contracts are construed against the drafter. Sands v. E.I.C., Inc., 118 Cal.App.3d 231 (1981).

This rule will benefit the average consumer who is handed a “boilerplate" contract and asked to sign it, or they won’t get a credit card. If, however, some revisions are made by both parties, the question of who drafted the contract can become essential to the determination of a contract dispute.

Effect of Contract Deemed “Mutually Drafted"

Where there is a joint drafting of the agreement, or where the terms and conditions of an agreement have been negotiated by both parties, the contract will not be construed against either party. Mitchell v. Exhibition Foods, Inc., 184 Cal.App.3d 1033, 1042 (1986). Upon a determination by a court that the contract is jointly or mutually drafted, deficiencies in the contract cannot be held against either party. Even if a party negotiated a smaller percentage of the contract than the opposing side, a c ourt may find that enough of the contract was revised that the contract will be mutually drafted. In other words, the negotiation need not be equally proportioned for a finding of joint drafting.

Conclusion

In a contract dispute, the party that drafted the agreement may have the language used against them. If there is a finding, however, that both parties had input, that presumption goes away. Thus, it is important to find an experienced contract litigation attorney in your area to guide you through any dispute you may have.

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