Interpretation of Contracts. Jerilyn Dawson hired Michael Shaw of the law firm of Jones, Waldo, Holbrook, and McDonough to represent her in her divorce. Dawson signed an agreement to pay the attorney's fees. The agreement did not include an estimate of

Question

how much the divorce would cost. When Dawson failed to pay, the firm filed a suit in a Utah state court to collect, asking for an award of more than $43,000. During the trial, Shaw testified that he had told Dawson the divorce would cost "something in the nature of $15,000 to $18,000." The court awarded the firm most—but not all—of what it sought. Both parties appealed: Dawson contended that the award was too high, and the firm complained that it was too low. What rule of interpretation discussed in this chapter might the appellate court apply in deciding the appropriate amount of damages in this case? If this rule is applied, what will the court likely decide? Explain.

Answer 1

Interpretation of contracts
The Utah Supreme Court held in part that the attorney's oral statement capped the amount of the fees to which the firm was entitled and reduced the award to $18,000. The court stated the general rule that contracts between attorneys and clients are construed in favor of clients, when there are ambiguities. The general contract rule is that ambiguous wording is interpreted against the drafter of the contract. Here, the written contract did not say whether the parties intended the fees to be capped. "If a cap was agreed to, it was by virtue of a subsequent oral agreement." This, the court said, was "Shaw's statement to his client that she could ‘count on' not more than $18,000." Construed against the lawyer, this limit was binding.