The main purpose of a contract is to establish an agreement between parties to express their rights and obligations. However, just because you may agree to something, in writing or verbally, does not mean that it will be enforceable if a legal dispute is to arise. Two recent Massachusetts Appeals Court cases are examples of how this can work in practice.
In Goddard v. Goucher, a Massachusetts Appeals Court recently held that parties may not stipulate to legal conclusions (as opposed to factual) and that courts are not bound by these stipulations. In this case, the parties sought to enforce a purchase and sale agreement to sell a parcel of land; never having been a final signed version of the purchase and sale agreement, they entered into pretrial stipulations that this purchase and sale agreement was a valid and enforceable contract. At trial, the trial judge rejected the stipulation that a valid and enforceable contract was created, and the appellate court agreed. Because the issue of whether the contract was valid is a question of law, as opposed to whether it was actually signed by parties or there was a meeting of the minds, which are factual issues that a party can stipulate to, the Court concluded that the trial judge was within his authority to reject the stipulation.
In Downey v. Chutehall Construction Co., Ltd. , a Massachusetts Appeals Court recently concluded that a waiver of statutory requirements by an individual homeowner did not preclude a contractor, who violated the statute, from being liable. In this case, the contractor alleged that the homeowner did not allow the contract to comply with state’s building code requirements relating to roofing – specifically, the contractor argued that the homeowner did not wish for the contractor to strip the existing roof materials, which was required by the code. The contract claimed that this was a waiver by the homeowner and it was a defense to claims under Chapter 93A. The Court concluded that the waiver did not preclude the contractor from being held liable of violations of the building code and resulting 93A violations, especially because the violation carried potential public safety concerns. While the court did acknowledge that a statutory right or remedy may be waived if it would not frustrate the public policies of the statute, it did state that such right may not be disclaimed if the waiver could do violence to the public policy underlying the legislative enactment.
These recent cases are just examples. There is a plethora of past cases that illustrate instances in which, despite the parties’ intents and agreements, a court could deem an entire agreement or terms contained therein, unenforceable. That is why it is always a good idea to have legal counsel review your contracts, especially if big stakes are involved.
