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FLORIDA NONCOMPETE DEFENSE: AMBIGUOUS CONTRACTUAL TERMS CAN DEFEAT ENFORCEMENT ACTIONS

When an employer seeks a temporary injunction to enforce a noncompete or non-solicitation covenant of an employment agreement, it is asking the court to force its former employee stop certain conduct prohibited by the agreement.  Non-competition contracts often have ambiguous terms, and one of the main issues in litigation is the meaning of those disputed terms.   Peter Mavrick is a Fort Lauderdale non-compete lawyer who has extensive litigation experience with non-compete agreements and claims for injunctive relief.

An important distinction in examining an ambiguous term is whether it is a patent ambiguity or a latent ambiguity.  A patent ambiguity is one which appears on the face of a contract and arises from the use of defective, obscure, or insensible language. Emergency Associates of Tampa, P.A. v. Sassano, 664 So. 2d 1000 (Fla. 2d DCA 1995). For example, a non-compete contract that attempts to prohibit solicitation may state, “Employee shall not solicit from Employer’s clients any quality the same as or to that done by Employer,” but such wording would be incomprehensible.  It is unclear what is meant by the term “quality” in this context.  Patent ambiguities cannot be resolved by introduction of parol or extrinsic evidence. Parol evidence consists of earlier or contemporaneous agreements that might add to, vary, or contradict the writing in the contract. Black’s Law Dictionary (10th ed. 2014). Extrinsic evidence is evidence that relates to the contract but comes from other sources, such as oral or written statements between the parties or consists of the circumstances surrounding the agreement. Id. If a court allows parol or extrinsic evidence to interpret a patent ambiguity, it will be improperly rewriting the contract by supplying words the parties themselves did not choose to include. Landis v. Mears, 329 So.2d 323 (Fla. 2d DCA 1976). When no part of a contract shows the parties’ intention, the court can do nothing but declare the patently ambiguous provision a nullity. See Connelly v. Smith, 97 So.2d 865 (Fla. 3d DCA 1957).

Conversely, a latent ambiguity exists “where the language employed is clear and intelligible and suggests a single meaning, but some extrinsic fact or extraneous evidence creates a necessity for interpretation or a choice among two or more possible meanings.” Ace Elec. Supply Co. v. Terra Nova Elec., Inc., 288 So.2d 544 (Fla. 1st DCA 1973).  In Ace Elec. Supply Co. v. Terra Nova Elec., Inc. the plaintiff alleged that it sold goods to a corporate defendant on an open account, which was secured by a written guaranty by the individual defendants.  The guaranty stated that purchases were to be authorized by the “undersigned” only. However, there were two individual guarantors who signed the guaranty.  It was unclear whether the authorization could be made by one or both individuals and if only one could authorize the purchases, it did not state which one. The court properly allowed extrinsic evidence to explain the parties’ intent for the term “undersigned.”

Even the most cautious contract drafters with the most exhaustive imaginations will rarely cover every contingency that can arise. Certain guidelines are necessary to assist the court in arriving at its conclusion as to what result the parties intended under the unanticipated circumstances. Hunt v. First Nat. Bank of Tampa, 381 So.2d 1194 (Fla. 2d DCA 1980). Hunt stated that where one interpretation of an ambiguous term would lead to an agreement which is fair and equitable, and another would result in an unfair and inequitable agreement, then the former must be selected.  Peter Mavrick is a Fort Lauderdale non-compete attorney who represents clients in non-compete lawsuits and claims for injunctive relief.

Generally, Florida law requires that ambiguities in contacts be construed most strongly against the drafter of the agreement.  Berloni S.p.A. v. Della Casa, LLC, 972 So.2d 1007 (Fla. 4th DCA 2008).  However, courts cannot construe a restrictive covenant, such as a non-solicitation covenant, narrowly against the drafter of the contract. Fla. Stat. § 542.335. Therefore, the proper construction of an ambiguous provision is vital to obtaining a fair and equitable result.

This article does not serve as a substitute for legal advice tailored to a particular situation.  Peter T. Mavrick can be reached at: Telephone: 954-564-2246; Address: 1620 West Oakland Park Boulevard, Suite 300, Fort Lauderdale, Florida 33311.

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