The Durable Power of Attorney is traditionally one of the basic documents executed when undertaking your estate planning, creating a mechanism to handle your financial affairs prior to your death.  However, because of the broad powers granted in it, you should analyze the associated risks and benefits before signing one.  In some circumstances, you are better off without it.

First, what is a “power of attorney”?  Through a power of attorney, you designate the person or persons (your “agent”) who you are legally authorizing to handle your affairs.  The designation may be limited in duration or in scope.

By designating a power of attorney as “durable” (and incorporating the appropriate language), the authority will remain in place even if you become mentally incompetent.  Therein lies the value of this document in estate planning – it creates an easy means for someone to be appointed to manage your financial affairs should you become unable to do so.  For maximum usefulness, the durable power of attorney should have no limitations or restrictions thereby allowing your agent to handle whatever may arise, whether anticipated or not.

But such broad powers are susceptible to abuse by a designated agent.  Once you deliver a validly-executed Durable Power of Attorney to your agent, you run the risk that your agent may perform acts which you do not approve or which may not be to your benefit.  You may be able to recover any funds improperly spent by your agent.  However, you not only run the risk that your agent may be judgment-proof (e.g., has no collectable assets) but also incur the costs of attorney fees to collect such funds.

If you lose your mental competency prior to executing a durable power of attorney, a court-appointed guardianship may then be the only recourse available for someone looking to oversee your affairs.  A guardianship proceeding can be both costly and time-consuming in comparison to the execution of a durable power of attorney yet both achieve the same results.

A guardianship will also require that the court first declare that you are not mentally competent to handle your affairs – a declaration which can be an emotionally unbearable consequence for many families.

In most instances, the durable power of attorney will be your best option, but the risks should first be understood.  The estate planning attorneys of Bogin, Munns  Munns are glad to consult with you on this and other matters when arranging your estate planning.

John Wright is a corporate attorney with Bogin, Munns, & Munns, P.A., a full service law firm with offices in Orlando, Clermont, Kissimmee, Deltona, Daytona Beach, Ocala, Melbourne, Gainesville, and Leesburg, Florida.  Mr. Wright works out of the Melbourne and Kissimmee offices of the firm and welcomes questions and comments regarding the above and can be reached at jwright@boginmunns.com.

NO LEGAL ADVICE: This blog entry is not intended as legal advice nor should you consider it as such. It is intended only as general information.  You should not act upon this information without retaining professional legal counsel. Please keep in mind that merely subscribing to or reading this blog or otherwise contacting Bogin Munns & Munns, P.A. in the manner that you have will not establish an attorney-client relationship with our firm. Bogin Munns & Munns, P.A. cannot represent you until the firm knows there would not be a conflict of interest and the firm determines that it is otherwise able to accept the engagement. The engagement would also be confirmed by a written agreement.

As Seen In the July / August 2010 edition of orlandoREALTOR

By: Henry M. Cooper, ESQ.

Under the Protecting Tenants At Foreclosure Act of 2009, certain tenants now have right post foreclosure sale. This act provides that when a foreclosure occurred on a federally-related mortgage loan or on any dwelling or residential real property, the party taking title to the property via a Certificate of Title post foreclosure sale assumes the property subject to the rights of a “bona fide tenant.” If this new owner desires to evict the bona fide tenant, the new owner must now give the bona fide tenant a 90-day notice to vacate. This assumes, however, that the bona fide tenant is current in rent payments and otherwise in good standing under the terms of the bona fide lease. If not, normal eviction procedures are applicable.

Notwithstanding the foregoing, if a “bona fide lease” was entered into before the date of the foreclosure sale, the bona fide tenant has the right to remain in the property until the expiration of the term of the bona fide lease. The bona fide lease may be terminated prior to the expiration of the term of the bona fide lease; however, if the new owner has sold the property to a purchaser who will occupy the property as a primary residence subject to the 90-day notice to vacate.

The act defines “bona fide tenant” to mean a tenant who is not the mortgage or the child, spouse, or parent of the mortgagor. In addition, the act defines “bona fide lease” to mean a lease that requires the receipt of rent that is not substantially less than the fair market rent for the property.

READ THE FULL PUBLICATION HERE.

– Henry M. Cooper, Esq., is a shareholder and handles the residential real estate practice of Bogin, Munns, & Munns, P.A., a full service law firm with offices in Orlando, Clermont, Kissimmee, Deltona, Daytona Beach, Ocala, Melbourne, Gainesville, and Leesburg, Florida.  He welcomes questions and comments regarding the above and can be reached at hcooper@boginmunns.com.

NO LEGAL ADVICE: This blog entry is not intended as legal advice nor should you consider it as such. It is intended only as general information.  You should not act upon this information without retaining professional legal counsel. Please keep in mind that merely subscribing to or reading this blog or otherwise contacting Bogin Munns & Munns, P.A. in the manner that you have will not establish an attorney-client relationship with our firm. Bogin Munns & Munns, P.A. cannot represent you until the firm knows there would not be a conflict of interest, and the firm determines that it is otherwise able to accept the engagement.

According to Florida Statute Section 316.614 (4), it is unlawful for any person: (a) To operate a motor vehicle in this state unless each passenger and the operator of the vehicle under the age of 18 years of age are restrained by a safety belt or by a child restraint device pursuant to s. 316.613, if applicable; or (b) To operate a motor vehicle in this state unless the person is restrained by a safety belt. Florida Statute Section 316.614 (5) further states that it is unlawful for any person 18 years of age or older to be a passenger in the front seat of a motor vehicle unless such person is restrained by a safety belt when the vehicle is in motion.

In addition, Florida Statute Section 316.613 (1) (a) states that every operator of a motor vehicle as defined herein, while transporting a child in a motor vehicle operated on the roadways, streets, or highways of this state, shall, if the child is 5 years of age or younger, provide for protection of the child by properly using a crash-tested, federally approved child restraint device. For children aged through 3 years, such restraint device must be a separate carrier or a vehicle manufacturer’s integrated child seat. For children aged 4 through 5 years, a separate carrier, an integrated child seat, or a seat belt may be used.

In July, 2009, the Florida legislature amended Florida Statute Section 316.614 (8) to remove language that previously allowed a motorist to be cited for a seatbelt violation only if a driver had first been detained for violating another motor vehicle law. Now, a motorist can actually be detained and cited for not wearing a seatbelt even if he/she is not cited for committing any other violation.

In addition to monetary penalties imposed for violation of Florida Statute Section 316.614, failure to comply with this seatbelt law can and will be used against you by an at-fault driver and his/her liability insurance carrier in your negligence claim for injuries- even if that at-fault driver was cited for causing the collision. Florida Statute 316.614 (10) states that while failure to wear your seatbelt will not constitute negligence per se, nor shall such violation be used as prima facie evidence of negligence or be considered in mitigation of damages, such violation may be considered as evidence of comparative negligence, in any civil action. The practical effect is that a jury in a negligence lawsuit can find you up to 50% at fault for the cause of your injuries if you were not wearing your seatbelt at the time of your motor vehicle accident. If that occurs, the amount that a jury awards you will automatically be cut by the percentage of fault that a jury finds you for not wearing your seatbelt.

Regardless, under Florida case law a Defendant in a lawsuit still has the burden of pleading and proving that you did not use an available and operational seatbelt, that your failure to use the seatbelt was unreasonable under the circumstances, and that there was a causal relationship between the injuries that you sustained and your failure to buckle up. The Defendant has the burden of proof in providing “competent evidence” of this causal relationship that is not uncertain, speculative, or conjectural because that is the evidentiary standard applicable to Plaintiffs for establishing their damages. Often times, liability insurance adjusters for the at-fault driver fail to offer any substantial, competent evidence to show this causal connection. It is obviously much easier for the at-fault party to show a causal connection between your non-use of a seatbelt to a facial or head injury than it is if you have sustained an internal injury, such as an injury to your spine.

For practical and legal reasons, don’t forget to make sure you and your passengers buckle up!

There was a time when a handshake and your word was as good as any written contract. Those days, unfortunately, have long since past.  Today, reaching an agreement and getting it in writing is a key to any successful transaction.  Most people will enter into hundreds of contracts during the course of their lifetime, such as: entering into an employment agreement, opening a bank account or applying for a loan, renting an apartment or house, purchasing a vehicle, hiring a contractor to make home repairs, ordering products to be used in your business, entering into a partnership agreement, leasing an office for your business, purchasing an existing business, and buying a home.  Here are a few suggestions to keep in mind when you are considering entering into your next contract.

Read it (Yes, even the fine print)!

I am absolutely shocked how often people say to me: “You must be an attorney because nobody else spends time to read that paperwork.”  When you enter into a contract, it is important to know what it is that you are agreeing to do (or not do).  The need to read and understand the terms of the contract becomes even more critical the higher the cost at issue.  It is often said that the ‘American Dream’ is to own your own home or business.  Although these generally are the largest single investments people will ever make, many people do not take the time to read the stacks of paperwork that make up the contract.  If you are not going to read the paperwork yourself, at least hire an attorney to ensure that you are buying exactly what you think you are buying.  The terms that make up a contract really do matter.

Clarify it!

It has been said that the practice of law is simply the science of words.  An outrageous example of this was Bill Clinton’s response to a question before the grand jury, wherein he famously stated “It depends on what the meaning of the words ‘is’ is.”  Do you and the party you are entering into a contract with have the same understanding of what the terms mean?  If there is ever a dispute and you are unable to come to a prompt agreement, you may end up spending a lot of time and money having the court interpret the terms for you.  At that point, the control over the interpretation may be out of your hands completely.  For guidance on making that determination, the court may look at things such as: 1) the history of previous dealings between the parties, 2) the understanding that is common in the industry, 3) the terms as developed by our lawmakers or in the courts, and 4) public policy considerations.  As a result, the court’s interpretation of the terms of the contact may end up being the exact opposite of what you actually intended the terms to mean.  Always make sure the terms are clear and unambiguous before you sign the contract.  If you are not clear about a term, ask for clarification before you sign the contract.

Keep it!

Make sure that you always keep your original contract, as well as any modifications and correspondence regarding the contract.  It would be nice if everyone kept their word and abided by the promises contained in their contracts.  Since that is not the case, however, you may need to hire at attorney to enforce your contract.  Having all relevant documentation related to your contract is critical in this regard.  An attorney cannot give you thorough legal advice about your rights without the documentation of the contract any more than a doctor should give you a diagnosis of illness without doing a thorough examination.

Consult an Attorney!

Being penny-wise by not hiring an attorney up front may end up being pound-foolish for you in the end!  Spending a little money to have a qualified attorney review your contract (and revise as necessary) at the beginning will give you peace of mind that your intent will be carried out with less stress, headaches and expense in the long run.  If you would like to consult with an attorney to review your contract, call Bogin, Munns & Munns, P.A. at (352) 332-7688 in Gainesville or (407) 578-1334 in Orlando.

– Adam S. Towers , Esq., is a shareholder and manages the Gainesville office of Bogin, Munns, & Munns, P.A., a full service law firm with offices in Orlando, Clermont, Kissimmee, Deltona, Daytona Beach, Ocala, Melbourne, Gainesville, and Leesburg, Florida.  He welcomes questions and comments regarding the above and can be reached at atowers@boginmunns.com.

NO LEGAL ADVICE: This blog entry is not intended as legal advice nor should you consider it as such. It is intended only as general information.  You should not act upon this information without retaining professional legal counsel. Please keep in mind that merely subscribing to or reading this blog or otherwise contacting Bogin Munns & Munns, P.A. in the manner that you have will not establish an attorney-client relationship with our firm. Bogin Munns & Munns, P.A. cannot represent you until the firm knows there would not be a conflict of interest, and the firm determines that it is otherwise able to accept the engagement.

While non-compete agreements were once a rarity, they have become somewhat common in the modern workplace.  Issues regarding the drafting, interpretation, and enforcement of such agreements are common topics for the employment lawyers at Bogin, Munns, & Munns, P.A.  In this regard, the firm both meets with and often represents employers seeking to draft or enforce such agreements as well as the employees that are subject to same.

Generally speaking, there are numerous common misconceptions as to the legality of non-compete agreements.  Prospective clients often believe that such agreements are either always enforceable or that they are rarely enforceable.  The reality, however, is that neither is true.  The courts look to a number of factors on a case by case basis in determining whether to enforce the terms of a particular agreement.  Accordingly, getting advice from a qualified and experienced attorney regarding such agreements is certainly prudent for both affected employers and employees.

In Florida, non-compete agreements are governed by both statute and the decisions interpreting same.  In this regard, section 542.335 of the Florida statutes provides the courts with both authority and some guidance as to the enforcement of non-compete and other related restrictive covenants.  For example, as noted in such statute, such agreements must be in writing and executed by the affected employee to be valid.  They must also, generally speaking, be reasonable in scope, time, and geographic area.  However, the mere fact that an agreement may be unreasonable in one or more of these areas will not absolutely preclude enforcement as the courts are authorized to limit the application or length of the restrictive period while still enforcing same.

Additionally, it should be noted that merely having an agreement and a breach of same does not mean that the courts will enforce such agreement.  In many cases, the key issue is whether the employer seeking enforcement can articulate one or more legitimate business interests supporting such restrictive covenants.  While section 542.335 provides several examples of such legitimate business interests, it is, of course, advisable to speak to a qualified attorney as to the specific facts of your matter.

Ultimately, a dispute involving a non-compete agreement can be a costly endeavor for the affected employee, the prior employer, and even the new employer.  In addition to money damages, such claims often involve requests for injunctive relief as well.  Moreover, Florida law allows for the recovery of attorney fees by the prevailing party in litigation regarding such agreements.  Of course, prudent actions by both employers and employees can often avoid litigation, but that is not always the case.  The employment attorneys at Bogin, Munns, & Munns, P.A. can offer advice and assistance at any stage of a matter involving these agreements and have significant experience in drafting, enforcement, and defense of same.

– Joseph Shoemaker, Esq., is an attorney with Bogin, Munns, & Munns, P.A., a full service law firm with offices in Orlando, Clermont, Kissimmee, Deltona, Daytona Beach, Ocala, Melbourne, Gainesville, and Leesburg, Florida.  Mr. Shoemaker works out of the Leesburg office of the firm and welcomes questions and comments regarding the above and can be reached at jshoemaker@boginmunns.com

NO LEGAL ADVICE: This blog entry is not intended as legal advice nor should you consider it as such. It is intended only as general information.  You should not act upon this information without retaining professional legal counsel. Please keep in mind that merely subscribing to or reading this blog or otherwise contacting Bogin Munns & Munns, P.A. in the manner that you have will not establish an attorney-client relationship with our firm. Bogin Munns & Munns, P.A. cannot represent you until the firm knows there would not be a conflict of interest, and the firm determines that it is otherwise able to accept the engagement. The engagement would also be confirmed by a written agreement.

Most people who are involved in a motor vehicle accident are often confused when they meet with a lawyer for the first time after an accident.  Often times, they expect to see the justice, drama and large awards like they see on television.  They expect to be sent to a doctor at the law firm’s bidding, they expect that the lawyer will make the at-fault party pay for all the medical bills, lost wages, car damage, give them large sums of money for pain and suffering and then life goes on as usual for the victim.  Unfortunately, this is often far from what happens in a typical motor vehicle accident case.  While it is true, in most case the at fault party does pay medical bills, lost wages, car damage, and ends up paying sums of money for pain and suffering to a victim, the truth is that sometimes the compensation to a victim is very little or even none.  The cases involving large sums of money are often limited to very tragic accidents involving death or catastrophic injuries to a victim.  Fortunately, these death or catastrophic injury cases are not the typical case, but just the same the typical motor vehicle accident case does have serious and significant impacts on a victim’s life.  Unfortunately, the drama that is often exciting and entertaining as it unfolds on television is now not so appealing because it is personal.  To a victim the whole experience of being involved in a motor vehicle accident often becomes very overwhelming because it can often cause serious physical injury, time away from work and sometimes financial devastation to someone who was just at the wrong place at the wrong time.

The process of a typical motor vehicle accident case is often very difficult to explain to a victim because an innocent victim just cannot comprehend why the law would require them to prove the extent of their injuries and damages when they have done nothing wrong to cause this difficult misfortune upon themselves.  They are also very confused as to why the law would protect the rights of the at-fault party.  Yes, the at-fault party does have legal defenses along with the innocent victim’s possible right for recovery!  Worse yet, there are even some instances where the at-fault party may even escape financial responsibility while leaving a lifelong injury to an innocent victim.  Sadly, an automobile accident like life just isn’t always fair.  While the law does make every reasonable effort to assist those injured parties whose life has just been placed in ruin by another, it also does set forth very specific and solid guidelines with regard to victim’s compensation.   As unfair as it may seem, the fact is that the burden of proving pain and suffering does fall on the victim and they must prove what they have lost is a legal and justifiable injury/damage caused by the auto accident to be awarded compensation.  Unfortunately, most victims’ whether they receive money or not will rarely ever feel that have been justly compensated for their loss.  Victims of motor vehicle accidents may always bare the horrible consequences of permanent, crippling injury and sadly…sometimes it may even change their life forever…regardless of any amount of money received from a negligent party.

– Cynthia M. Thomas, Esq., is a personal injury attorney with Bogin, Munns, & Munns, P.A., a full service law firm with offices in Orlando, Clermont, Kissimmee, Deltona, Daytona Beach, Ocala, Melbourne, Gainesville, and Leesburg, Florida.  She welcomes questions and comments regarding the above and can be reached at cthomas@boginmunns.com

NO LEGAL ADVICE: This blog entry is not intended as legal advice nor should you consider it as such. It is intended only as general information.  You should not act upon this information without retaining professional legal counsel. Please keep in mind that merely subscribing to or reading this blog or otherwise contacting Bogin Munns & Munns, P.A. in the manner that you have will not establish an attorney-client relationship with our firm. Bogin Munns & Munns, P.A. cannot represent you until the firm knows there would not be a conflict of interest, and the firm determines that it is otherwise able to accept the engagement. The engagement would also be confirmed by a written agreement.

There are three common types of ownership for property owned by more than one person.

1.  Tenancy by the entireties:

Only a husband and wife can own property as tenants by the entireties.  If real property is owned by a husband and wife, there is a presumption of a tenancy by the entireties.  In this form of ownership, there is a right of survivorship – if one spouse dies, the other gets the entire property.  If it is your intent to establish a right of survivorship with your spouse, make sure that title to the property indicates the right of survivorship or designates you and your spouse as husband and wife.

2.  Tenants in common:

If title to the property specifically describes the parties as tenants in common or, if there is no express indication of a right of survivorship between two unmarried persons, there is a presumption that the property is owned amongst the parties as tenants in common.  In this ownership form, each tenant in common may freely transfer his or her interest and leaves his or her share of the property to his or her heirs or beneficiaries.

3.  Joint tenancy with right of survivorship:

Two or more unmarried persons.  The surviving persons will own all of the property upon the death of others.  If it is your intent to establish a joint tenancy with the right of survivorship, you should expressly indicate on title to the property the “right of survivorship”.

– Spencer R. Munns, Esq., is a shareholder Bogin, Munns, & Munns, P.A., a full service law firm with offices in Orlando, Clermont, Kissimmee, Deltona, Daytona Beach, Ocala, Melbourne, Gainesville, and Leesburg, Florida.  He welcomes questions and comments regarding the above and can be reached at smunns@boginmunns.com.

NO LEGAL ADVICE: This blog entry is not intended as legal advice nor should you consider it as such. It is intended only as general information.  You should not act upon this information without retaining professional legal counsel. Please keep in mind that merely subscribing to or reading this blog or otherwise contacting Bogin Munns & Munns, P.A. in the manner that you have will not establish an attorney-client relationship with our firm. Bogin Munns & Munns, P.A. cannot represent you until the firm knows there would not be a conflict of interest, and the firm determines that it is otherwise able to accept the engagement.

The first part of this article discussed the economic realities test which is applied in minimum wage, overtime, and Family & Medical Leave Act cases.  If the case at issue involves, for example, race discrimination under Title VII, sex discrimination, disability discrimination, etc., then the courts apply the common law test to determine whether the worker was an employee or an independent contractor.

The elements of the common law test are: (1) the intention of the parties (i.e., did the parties intend to enter into an employee/employer relationship or did they agree to create an independent contractor relationship); (2) the skill required in the particular occupation (this element is similar to economic reality test element number four); (3) the party furnishing the equipment and the place of work (this element is similar to economic reality test element number three); (4) the method of payment, whether by time or by the job (this element is similar to economic reality test element number two); (5) the type of employment benefits provided (i.e., if the employer provides the worker with medical insurance, then this factor tends to prove employee status); (6) the manner in which the work relationship is terminated (i.e., if the worker can be terminated at-will, then that tends to prove employee status); (7) the importance of the work performed as part of the business of the employer (this element is similar to economics reality test element number six); and (8) the manner in which taxes on income is paid (i.e., if the employer deducts standard payroll taxes, then this factor tends to prove employee status).

There are subtle differences between the economic realities test and the common law test.  The critical difference is that the common law test is generally regarded as setting a slightly higher threshold to proving employee status.  However, the courts are generally in agreement that even under the common law test, both tests are designed to measure the degree of control that the purported employer exerts over the employee.  Therefore, the fact that an employer does not offer insurance benefits may have less to do with independent contractor issues and more with the fact that the employer simply does not wish to incur this cost.  Furthermore, some courts have construed an employer’s unilateral refusal to deduct payroll taxes as a condition of employment not as proof of independent contractor status but rather proof that it exercises substantial control over the worker.  Should you have any questions regarding your current arrangement, feel free to contact one of the employment attorneys at Bogin, Munns & Munns, P.A. to coordinate a consultation.

– Daniel Perez, Esq., is an attorney with Bogin, Munns, & Munns, P.A., a full service law firm with offices in Orlando, Clermont, Kissimmee, Deltona, Daytona Beach, Ocala, Melbourne, Gainesville, and Leesburg, Florida.  Mr. Perez works out of the Melbourne office of the firm and welcomes questions and comments regarding the above and can be reached at dperez@boginmunns.com

NO LEGAL ADVICE: This blog entry is not intended as legal advice nor should you consider it as such. It is intended only as general information.  You should not act upon this information without retaining professional legal counsel. Please keep in mind that merely subscribing to or reading this blog or otherwise contacting Bogin Munns & Munns, P.A. in the manner that you have will not establish an attorney-client relationship with our firm. Bogin Munns & Munns, P.A. cannot represent you until the firm knows there would not be a conflict of interest, and the firm determines that it is otherwise able to accept the engagement.

Dog bite cases in Florida are governed by Florida Statute 767.04.  In pertinent part, Statute 767.04 provides that the “owner of any dog that bites any person while such person is on…the property of the owner of the dog, is liable for damages suffered by persons bitten, regardless of the former viciousness of the dog or the owners’ knowledge of such viciousness.”  “Owner” includes any person, firm, corporation, or organization possessing, harboring, keeping or having control or custody of a dog.

The Statute imposes absolute liability upon the dog owner when the dog-bite victim is in a public place or lawfully on or in a private place except when the dog is carelessly or mischievously provoked or when the owner displays in a prominent place on the premises a sign easily readable including the words “Bad Dog.”  The presence of this sign does not apply to a person under the age of 6.

By displaying a proper “bad dog” sign, an owner may escape liability.  However, this defense maybe attacked in several ways.  First, it may be that the sign(s) were not in a prominent place, were not easily readable, or did not include the exact words “bad dog.”   Second, the statutory language does contain a qualifier that bypasses the sign defense if damages “are proximately caused by a negligent act or omission of the owner.”  For example, if an owner tells a visitor to ignore the sign, or indicates that the dog is not dangerous, the defense of the sign may not apply.

It is important when bitten by a dog to notify the owner immediately, notify animal control officials, photograph the bite, and seek medical attention.  The counsel of qualified legal representation is advisable as soon as possible after the bite, especially in cases of severe damage.

Pam Olsen, Esq., is an experienced personal injury attorney with Bogin, Munns, & Munns, P.A., a full service law firm with offices in Orlando, Clermont, Kissimmee, Deltona, Daytona Beach, Ocala, Melbourne, Gainesville, and Leesburg, Florida.  Ms. Olsen works out of the Ocala office of the firm and welcomes questions and comments regarding the above and can be reached at polsen@boginmunns.com

NO LEGAL ADVICE: This blog entry is not intended as legal advice nor should you consider it as such. It is intended only as general information.  You should not act upon this information without retaining professional legal counsel. Please keep in mind that merely subscribing to or reading this blog or otherwise contacting Bogin Munns & Munns, P.A. in the manner that you have will not establish an attorney-client relationship with our firm. Bogin Munns & Munns, P.A. cannot represent you until the firm knows there would not be a conflict of interest, and the firm determines that it is otherwise able to accept the engagement. The engagement would also be confirmed by a written agreement.

In all contracts there is an implied covenant of good faith and fair dealing.  The purpose of the implied duty of good faith is to protect the parties’ reasonable commercial expectations.

This legal concept is fair and just and can often be relied upon by a party to a contract; however, there are limitations.

This duty of good faith and fair dealing must relate to the performance of an express term of the contract.  It is not an abstract and independent term of a contract, which can be asserted to claim a breach when all other terms have been performed pursuant to the contract requirements.

The implied duty of good faith and fair dealing cannot be used to vary or modify a fully specified, unambiguous term of a contract.  A court will not  do that; it will not apply this legal doctrine in that manner.

Sometimes parties to a real estate contract or other contractual dispute seek to claim a breach of contract when things don’t go their way, even though there has been no breach of any particular contract term.  This is not the proper application of this doctrine.

It is more properly raised when there is an express contractual duty or obligation on the part of one party, but such party has sole discretion in complying with such duty, but acts unfairly or in bad faith in carrying out that duty.

One example where application was appropriate, was where a party to a contract agreed to “vigorously pursue… recovery of underpayments” but was given “sole discretion” to determine whether it was a justifiable expense and exercised bad faith in exercising that discretion.

An example where application was not appropriate, was where a buyer of real estate agreed to pay an additional $5 million bonus if the buyer was able to obtain approval to construct 600,000 square feet or more of air conditioned saleable space.  In this instance the contract did not impose on the buyer any duty to seek such approval and therefore there could be no implied duty to act in good faith in seeking such approval.  In other words, there was no express duty to which the implied duty of good faith could relate.

In contractual dispute negotiations, the doctrine of implied duty of good faith and fair dealing can be very useful, but its application must be clearly understood.

– Rulon D. Munns, Esq., is a managing shareholder of Bogin, Munns, & Munns, P.A., a full service law firm with offices in Orlando, Clermont, Kissimmee, Deltona, Daytona Beach, Ocala, Melbourne, Gainesville, and Leesburg, Florida.  He welcomes questions and comments regarding the above and can be reached at rulon@boginmunns.com.

NO LEGAL ADVICE: This blog entry is not intended as legal advice nor should you consider it as such. It is intended only as general information.  You should not act upon this information without retaining professional legal counsel. Please keep in mind that merely subscribing to or reading this blog or otherwise contacting Bogin Munns & Munns, P.A. in the manner that you have will not establish an attorney-client relationship with our firm. Bogin Munns & Munns, P.A. cannot represent you until the firm knows there would not be a conflict of interest, and the firm determines that it is otherwise able to accept the engagement.