A recent case from the Eleventh Appellate District provides an example of what can happen when parties enter into a contract that contains ambiguous language. In Look v. H & M Custom Home Builders Co., Inc., 2012 Ohio App. LEXIS 2654, property owners hired a contractor to construct their home. The relationship ended in a dispute that could only be resolved by determining which plans were the subject of the contract.
The home owners provided the contractor blueprints of the home they were planning to construct. The parties’ relationship turned sour and, before the home was complete, the owners ceased payment, claiming the contractor failed to construct the home in accordance with the original plans and specifications and omitted work from the project. In an effort to establish their damages and recover the entire cost of two rooms that were not constructed by the contractor, the owners offered the design plans to the court.
The problem with the contract was that it did not expressly detail the specifications for construction of the home. Instead, the contract incorporated the finalized, owner-approved site plans where it provided that “[u]pon final review and approval by the Owner and the Builder… the work drawings, site plan, and specifications shall become a part of this Contract as if they were fully rewritten” in the contract.
This language failed to clearly identify the plans that were to be the subject of the contract — the original plans included the additional rooms and the plans submitted to the county for approval had the rooms crossed out with the notation “not building.” The owners maintained that the original plans containing the rooms were the subject of the contract and they had not approved the plans omitting the rooms. The contractor maintained that the plans submitted to the county for approval were the subject of the contract and it could not be held responsible for rooms that were omitted from the project.
The Court relied on some fundamental laws of contracting. Namely, the Court stated that: (1) it must examine a contract “to interpret and give effect to the intentions of the contracting parties;” (2) “if contract terms are unambiguous, a court may not interpret the contract in a manner inconsistent with the clear language of the instrument;” and (3) if the terms of the contract are ambiguous, the court is permitted to consider extrinsic evidence to determine the intentions of the parties.
As a result of the ambiguous contract language regarding which plans were the subject of the contract, the trial court was permitted to go beyond the contract and into the post-agreement verbal negotiations and circumstances. The trial court determined that the two rooms were omitted from the contract. Furthermore, because an appellate court may not substitute its judgment for that of the trial court where there is some competent, credible evidence to support the trial court’s findings, the appellate court affirmed the trial court’s decision. The owners were unable to recover damages from the contractor for the omitted rooms because of ambiguous contract language.