by Dorothy F. Easley
For appellate practitioners, strategic litigation support to prevent errors and preserve errors that could not be prevented below is just as important as handling the actual appeal. We know that some of the ripest areas for reversal are jury instructions and verdict forms. On June 6, the Florida Supreme Court approved jury instructions for use in contract and business litigation cases that appellate attorneys advancing business appeals need to understand. Will Ferrell said it best in Anchorman: “I don’t know how to put this, but…[they] are kind of a big deal.”
It is worth underscoring that contract and business law cases have long needed standard jury instructions. The Fourth District Court of Appeal articulated the need for them almost 15 years ago:
In short, I sense a reluctance to give any meaningful jury instruction on this seemingly simple but legally complex contractual term. It is important in jury trials in contractual disputes for the court to instruct the jury as to the legal rights and obligations under the contract. Judges should not shrink from doing so on the theory that they thereby invade the factual province of the jury. The jury cannot possibly decide whether there has been a breach if they do not know what the law requires the parties to do or not do.
A key part of all jury trials in Florida is the judge’s instruction to the jury on the law and processes to be applied to make the jury decisions in the case.2 This was the focal point of the Florida Supreme Court when then-Chief Justice R. Fred Lewis first ordered the formation of a committee to address contract and business law instructions in a 2006 administrative order. His vision was that standard jury instructions worked well in other cases, but the instructions sorely needed to include more standard ones for contract and business law. There was already a standing committee on jury instructions generally, but they did not have the requisite business and contract law expertise to develop instructions for this specialized area of the law. Chief Justice Lewis wanted a dedicated committee on this specific subject area, with members who were expert in contract and business law to draft instructions that juries could use and understand at trial. So he ordered the formation of the Committee on Standard Jury Instructions — Contract and Business Cases on September 15, 2006.3 Unknown to many, The Florida Bar members who worked on the new jury instructions would do so for a whopping six years. The committee consisted of Florida Supreme Court justices, judges from the First, Third, and Fourth district courts of appeal, and appellate attorneys and trial attorneys around the state with years of experience and knowledge in contract and business law.4
That committee began by searching for states with contract and business jury instructions that they could use as a template for form; in the end, they chose California’s jury instructions. That was the starting point of their work to establish the final instructions we have available to us today.5 Below is a primer on the key parts of the instructions.
The instructions start in Ch. 400; the damages instructions are located under Ch. 500 and are not on the Florida Supreme Court’s website as of this writing. What is striking about these instructions is that they extensively cite legal support and contain significant discussion of the pertinent law.
Breach of Contract
The breach of contract group consists of five instructions, beginning with 416.1, Breach of Contract — Introduction.6 The next instruction within the breach of contract group is 416.2, Third-Party Beneficiary, which is self-explanatory but notably rooted in the Restatement (Second) of Contracts §302 (1981) definitions that Florida courts have adopted over time in contract cases. In fact, it was the courts’ guidance that led to a concise instruction to give the jury to determine easily if someone is a third-party beneficiary.7 The next within that group is instruction 416.4, Essential Factual Elements, which is utilized when any contract elements are contested, including whether 1) the parties “entered into a contract”; 2) the party fulfilled the terms of the contract (or was excused); 3) “all conditions required by the contract for (defendant’s) performance had occurred”; 4) defendant did not comply with the terms of the contract, by either doing something that was not allowed in the contract or not doing something that was required; and 5) the claimant suffered harm.8 Instruction 416.23, Anticipatory Breach, also falls within that group, and is given if the plaintiff claims anticipatory breach of contract to prove that the defendant indicated he or she “would not or could not perform the contract” and that plaintiff was “willing and able to perform the contract.”9
There are also five instructions in the contract formation group, starting with 416.3, Essential Factual Elements of Contract Formation. This instruction is used if 1) a party contests the formation of a contract or certain portions of it; and 2) those outstanding issues are not resolved by the judge as a matter of law prior to trial. Under this instruction, the elements of a contract are listed and what they mean are left to jury discretion. The next element of the instruction is, “The parties agreed to give each other something of value,” and the last element is, “The parties agreed to the essential terms of the contract.” The instruction, in simplest terms, further articulates Florida’s objective theory of contract to tell the jury that the parties’ intentions cannot be used to make this determination, only what the parties actually said or did.10 This is no small thing, given practitioners still stumble today over the erroneous notion that Florida follows a subjective — what the parties thought or intended — theory of contract.
The next instruction in the contract formation group is 416.8, Offer, which is given in trials in which there is documentary evidence or testimony that no offer was made. This instruction succinctly sets forth the three wickets required to prove that an offer was made: 1) One party has to communicate to the other that he or she is willing to “enter into a contract” with the other party; 2) there has to be communication between the parties that includes the essential terms of the offer; and 3) if this offer is made, then one party must reasonably assume that if he or she accepted the offer a contract would result.11
Logically following that offer instruction is instruction 416.9, Revocation of Offer, which is only given if the defendant claims he or she revoked the offer before claimant accepted it. That instruction sets forth three components, any one of which the claimant must prove: 1) The “defendant did not withdraw the offer”; 2) “claimant accepted the offer before defendant withdrew it”; or 3) defendant never communicated withdrawing the offer. If the defendant denies accepting the offer, then instruction 416.10, Acceptance, is given. That instruction is rooted in Florida decisional law that “an acceptance is not valid, and thus is ineffective to form a contract, unless it is communicated to the offeror.”12 Under instruction 416.10, the claimant has to prove to the jury that the defendant actually communicated “agreement to the terms of the offer” and that the agreement was to the original terms. There is also instruction 416.11, Acceptance by Silence or Conduct, which is given with or after 416.10. Recognizing the general rule that no response to an offer constitutes offer rejection, this instruction recognizes that a claimant must prove that both parties “understood silence or inaction to mean that the offer was accepted.” It is rooted in decisional law and the Restatement (Second) of Contracts §69(2), which recognizes three situations when silence or inaction is acceptance.13
Oral or Implied Contracts
There are three instructions on oral or implied contracts. The first is instruction 416.5, Oral or Written Contract Terms, which is given when the contract has any oral component. Instruction 416.6, Contract Implied in Fact, follows and is used when the jury has to “infer” a contract existed from the facts and circumstances when there was no oral or written contract. This instruction is rooted in case law and 17A Am. Jur. 2d Contracts §12 (2009). Instruction 416.7, Contract Implied in Law, is next and encompasses the familiar contractual terms of “quasi contract, unjust enrichment, restitution, constructive contract, and quantum meruit” that are not based on the facts, but on matters of equity that may be decided by a judge. There is an instruction included because these are also matters of law that may be decided by a jury. Instruction 416.7 states that the claimant must show the defendant owes him or her money by the claimant proving a benefit, knowledge of the benefit, acceptance of the benefit, and that it is fair that defendant pay for the benefit.14
There are a hefty seven instructions on contract interpretation. Instruction 416.14, Disputed Term(s), is first, which gives the jury the respective disputed terms of the contract and then tells the jury what each party believes the terms mean. Under this instruction, the parties have to prove that their interpretation is correct and the jury decides the term’s meaning at the time of contract creation by looking at “the plain and ordinary meaning of the language used in the contract as well as the circumstances surrounding the making of the contract.” The instructions allow reading an additional instruction if the court decides the case requires the jury to use “other methods” to make the decision on the contract terms, and cites substantial law in the notes.15 There are times when there are no ambiguities, and times when facts are in dispute and the case should be submitted to the jury, so these instructions help the court and counsel navigate through those situations.
The next instruction is 416.15, Meaning of Ordinary Words, which informs the jury that any disputed contract terms are read according to their “plain and ordinary meaning” and that the jury has the right, nevertheless, to conclude “that the parties intended the disputed term(s) to have another meaning.” The instructions cite substantial law to support them. Instruction 416.16, Meaning of Disputed Technical or Special Words, informs the jury that if the parties dispute the meaning of a technical term, the definition is determined by “the meaning used by people in that trade, business, or technical field,” and that the parties can agree that the technical terms have another meaning.16
Instruction 416.17, Construction of Contract as a Whole, instructs the jury that they have to concentrate on the whole contract when defining the terms.17 Instruction 416.18, Construction by Conduct, is given to help the jury interpret contract terms by looking at the parties’ conduct both “before and after the contract.”18 When contracts fail to state an end date, instruction 416.19, Reasonable Time, is given, which informs the jury that it has to decide if the party performed his or her part of the contract within a reasonable amount of time — which is subjective. Again, the instruction cites substantial law for further support.19
To further aid contract interpretation in matters concerning ambiguities, instruction 416.20, Construction Against Drafter, tells the jury that only after they have used all the previous instructions to define the disputed terms can they “construe” the disputed terms against the party who “drafted” the contract. Because the committee was concerned that this instruction might cause the jury to place too much importance on it, “[t]he Committee strongly recommends the use of this instruction in connection with a verdict form that clarifies, by special interrogatory, what the term or phrase is that the court has declared to be ambiguous.”20
There are also a robust 11 instructions on various contract affirmative defenses, the first being 416.25, Mutual Mistake of Fact. This instruction is given when the defendant wants the contract “set aside” “because the parties were mistaken about” something, the defendant proves the mistake, and the defendant “did not bear the risk of mistake.” Before this instruction is given, the court first decides if it was a material mistake. If it is, the court gives this instruction to the jury. Also under this instruction, the court has to decide if the “contract unambiguously assigns the risk” of mistake to the defendant or if it is reasonable to assign to the defendant. If the court decides yes, the instruction is not given.21
Instruction 416.26, Unilateral Mistake of Fact, is given if the court first decides there was a material mistake. In addition, the court decides if the “contract unambiguously assigns the risk” of mistake to the defendant or, if it is reasonable to assign it to the defendant, the instruction is not given. This instruction is given when the defendant wants the contract “set aside” because the defendant “was mistaken about” something. The defendant has to show that he or she was mistaken about something; that the claimant either caused or knew of the mistake or that the contract is “unconscionable” with the mistake; and that the defendant “did not bear the risk of the mistake.” This instruction is rooted in Florida decisional law and the Restatement (Second) of Contracts §§153, 154 (1979).22
Instruction 416.27, Undue Influence, is given when the defendant claims that he or she only agreed to the contract because the claimant “unduly pressured” him or her and, as such, the contract should be set aside. This instruction requires the defendant prove that he or she would not have agreed to the contract if the claimant had not pressured him or her, and then provides specific ways pressure was given.23 A 416.28, Fraud, affirmative defense requires a defendant to prove the fraudulent statement claimant made was material; claimant knew it was false; claimant made the statement to get defendant to agree to the contract; “defendant relied on the representation”; and defendant “would not have agreed to the contract” if he or she knew the statement was false. The instruction also focuses on the requirement to correctly plead this affirmative defense.24
Instruction 416.30, Waiver, explains to the jury that waiver can be oral, written, or stem from the parties’ conduct. To waive a right, the claimant 1) had to know the supposedly waived right existed; 2) knew the defendant could have performed the waived right; and 3) “freely and intentionally” gave up the right.25 Instruction 416.31, Novation, should be given when the defendant claims cancellation of the original contract and an agreement between the parties to substitute a new one.26 Instruction 416.32, Statute of Limitations, was drafted to be given when the defendant claims that the action was not filed within the applicable statute of limitations time period, which begins as of the date of the breach.27
Instruction 416.33, Equitable Estoppel, succinctly clarifies a much-until-now troubling area in the case law. The instruction explains that a defendant can use this defense if the claimant took a certain action, “spoke about” a fact, or “concealed or was silent about” a fact that he or she knew about, and the defendant relied on any of the above, causing the defendant to change his or her “position for the worse.” It adds that, before the court can submit this instruction to the jury, the court has to determine that any of the above was material.28 Instruction 416.36, Ratification, should be given when the defendant breached the contract by some act, and the claimant knew of the act and that he or she could “reject” the contract because of this act; however, the claimant accepted the act anyway and is bound by or “ratified” the contract.29
Two affirmative defense instructions remain undefined. Instruction 416.29, Negligent Misrepresentation, is at this time a discussion. “The committee recognizes that…[while] some authority exists suggesting that negligent misrepresentation can be asserted as an affirmative defense to a breach of contract claim,” there is not enough law on this issue to propose an instruction and further developments are required.30 There is also a comment, but no instruction yet, on 416.35, Judicial Estoppel, because it “is an equitable doctrine which a court is to determine.”31
Commercial and Contract Points of Law
There are nine instructions on Commercial and Contract Points of Law, including instruction 416.12, Substantial Performance, used when one party claims that the other party failed to perform “all of the essential things which the contract required,” so that party was relieved of his or her obligations, per the contract. Under this instruction, the party has to prove two things to prevail: 1) that he or she “performed in good faith”; and 2) that the other party got substantially what was promised under the contract and denying payment in full was unreasonable. If any deduction is needed, there is the ability to make a reduction in the damages section.32
A much-needed instruction 416.13, Modification, instruction is given when the claimant advances the original contract was modified, but defendant denies it. Using a reasonableness standard, the jury is instructed to look at the words and actions of the parties to determine if the contract was modified and that the “contract in writing may be modified by a contract in writing, by a subsequent oral agreement between the parties, or by the parties’ subsequent conduct.” The notes also discuss H.I. Resorts, Inc. v. Touchton, 337 So. 2d 854, 856 (Fla. 2d DCA 1976), and the rule that the parol evidence rule does not “bar” evidence proving the oral modification of written contracts.33
There is instruction 416.21, Existence of Conditions Precedent Disputed, for the defendant to show that he or she did not have a specific duty because the claimant did not comply with the condition precedent. The jury is informed that if “both the existence and the occurrence of a condition precedent are disputed,” then the defendant has to “prove that the parties agreed to the condition” and, once this wicket is met, the claimant has to show that he or she met the condition precedent (or the waiver of it). If the claimant does not, the defendant is otherwise not required to fulfill the specific duty.34
Instruction 416.22, Occurrence of Agreed Condition Precedent, is used when the defendant claims that in the contract, the parties agreed that defendant would not have a specific duty unless a certain condition precedent occurred. That instruction is only given if “both the existence and the occurrence of a condition precedent are disputed.”35
Instruction 416.24, Breach of Implied Covenant of Good Faith and Fair Dealing, defines for the jury good faith and fair dealing, instructs them on the parties’ duties, and instructs that the claimant advances the defendant failed to act as this instruction requires. The instruction sets forth a series of elements, all of which must be met, to show that the defendant failed to act in good faith: 1) There was a contract; 2) claimant substantially completed the contract; 3) defendant was able to perform the contract; 4) defendant “unfairly interfered with (claimant’s) receipt of the contract’s benefits”; 5) defendant did not meet the “reasonable contract expectations”; and 6) “claimant was harmed.”36
Instruction 416.37, Goods Sold and Delivered, is given in cases in which the claimant contends that he or she sold and delivered goods to the defendant and the defendant did not pay. The instruction also requires that a claimant prove the sale, delivery, and nonpayment of the agreed price or the reasonable value of the goods. Instruction 416.38, Open Account, defines “open account,” and explains that it is used when the claimant states the defendant owes him or her money as a result of the open account. The instruction explains that the claimant has to prove 1) a transaction with defendant; 2) that an “account existed”; 3) existence of an invoice; and 4) money owed on the account by defendant. Instruction 416.39, Account Stated, defines “account stated” and informs the jury of what a claimant must prove: 1) The claimant and defendant had a transaction; 2) they agreed on the amount owed or that claimant sent an invoice and the defendant did not timely object to the invoice; and 3) defendant “expressly or implicitly promised to pay,” but failed to pay any or all of the amount owed. Finally, instruction 416.40, Money Had and Received, explains that a claimant must prove that the defendant received money from a certain transaction and that “in all fairness” the defendant should refund the money.37
There are 11 instructions on damages. Instruction 504.1, Introduction to Contract Damages, succinctly introduces the concepts of contract damages that befuddle first-year contract law students. Instruction 504.2, Breach of Contract Damages, elegantly explains compensatory damages (504.2a) and special damages (504.2b). Instruction 504.3, Lost Profits, explains that for a claimant to recover lost profits, the claimant must prove it was the defendant that caused the claimant’s lost profits and the amount of lost profits “with reasonable certainty.” That instruction even explains “reasonable certainty” for the jury.38
Instruction 504.4, Damages for Complete Destruction of Business, informs the court that this instruction is only given when there is a “complete destruction” of the claimant’s business. In that instance, the jury is instructed that the claimant’s damages are based on the market value of the business and that anything less than “complete destruction” is compensated with the “lost profits” instruction.39
Instruction 504.5, Owner’s Damages for Breach of Contract to Construct Improvements on Real Property, covers the two most common situations in which the instruction would be pertinent. In the first scenario, the defendant makes no claim that claimant’s requested damages would “constitute unreasonable economic waste.” For this, a claimant recovers the (reasonable) amount to complete the job after subtracting “the balance due under the contract.” This second scenario is when defendant states that a claimant’s requested damages “constitute unreasonable economic waste.” If the jury finds that there would be no “unreasonable economic waste,” damages are assessed as described in the first scenario. If the jury finds the claimant’s damages would constitute “unreasonable economic waste,” however, damages are “the difference between the fair market value of [claimant’s] real property as improved and its fair market value if [defendant] had constructed the improvements in accordance with the contract, measured at the time of the breach.” This instruction is rooted in Florida decisional law that cites the Restatement (First) of Contracts §346 (1932).40
Instruction 504.6, Obligation to Pay Money Only, plainly tells the jury that any claimant is required to prove contract money damages if the action is one for breach “of a contract to pay money.”41 Instruction 504.7, Buyer’s Damages for Breach of Contract for Sale of Real Property, is given when a claimant seeks damages for the defendant’s breach of the contract to sell real property, not for specific performance, which is an equitable action. The instruction explains to the jury that a claimant must prove he or she was going to buy the property and, in doing so, can recover the money claimant paid toward the purchase as well as title expenses. This instruction also allows for damages when the defendant acted in bad faith or sold the property to another party after contracting with claimant. If the jury so finds, the claimant can recover “the difference between the fair market value of the property on the date of the breach and the contract price.” 42
Instruction 504.8, Seller’s Damages for Breach of Contract to Purchase Real Property, covers a claimant’s (the seller) damages when a buyer breaches a contract. The claimant has to prove that he or she was willing to do everything required for the closing. Once that is proven, he or she can recover damages. This instruction, again, does not cover specific performance, and is not given if the contract contains liquidated damages language. Damages are explained to be “[t]he difference between the contract sales price and the fair market value of the property on the date of the breach, less any amount which (defendant) previously paid,” as well as damages that were “contemplated” in the contract and “normally” occur during a breach of contract.43
There is also an instruction 504.9, Mitigation of Damages, for a defendant’s respective affirmative defense. Since this defense does not apply to nonexclusive contracts, the instruction is used only for exclusive contracts. If the jury finds a defendant’s breach of the contract (if there was one) resulted in damages, and that the claimant failed to use reasonable efforts to avoid the damages, the claimant cannot recover damages the defendant proves the claimant failed to use reasonable efforts to avoid. The instruction also allows the jury to award claimant damages for the expenses incurred during those reasonable efforts. This instruction is rooted in Florida decisional law and the Restatement (Second) of Contracts §350 (1981).44
The committee has even included an instruction 504.10, Present Cash Value of Future Damages, to specify how the jury awards damages and instructs them to use present value for future damages and defines them. The drafters’ note that this was a difficult standard instruction to give, as there is no one method used for this:
Until the Supreme Court or the legislature adopts one approach to the exclusion of other methods of calculating present money value, the committee assumes that the present value of future damages is a finding to be made by the jury on the evidence; or, if the parties offer no evidence to control that finding, that the jury properly resorts to its own common knowledge as guided by this instruction and by argument.45
Instruction 504.11, Nominal Damages, informs the jury that it can award a nominal amount for the breach of contract even if damages were not proven.46
These instructions are both comprehensive and well written. As to what these instructions in practical terms mean to us, these instructions have left little to be completed or updated. And beyond their intended assistance to jury trials, they will prove helpful to the bench and bar in distilling Florida’s legal standards in these complex areas of law to actual case analysis well before trial. What the instructions also teach are the valuable lessons of visionary pooling of expertise and collaboration to solve the continuing “legalese for layperson” instruction challenges in complex commercial trials to advance better decisionmaking by fact finders.
1 First Nat. Bank of Lake Park v. Gay, 694 So. 2d 784, 792 (Fla. 4th DCA 1997).
2 In re Supreme Court Committee on Standard Jury Instructions — Contract and Business Cases, Fla. Spr. Ct. Admin. Order AOSC06-47, 1 (Fla. Sept. 15, 2006).
3 Id. at 1-2, 6.
4 In re Standard Jury Instructions — Contract & Bus. Cases, 116 So. 3d 284, 286-90 (Fla. 2013).
5 Id. at 286.
6 Id. at 303-04.
7 Id. at 304.
8 Id. at 306.
9 Id. at 321.
10 Id. at 304-05 (citing Florida’s seminal case on objective theory of contract: Robbie v. City of Miami, 469 So. 2d 1384, 1385 (Fla. 1985)).
11 Id. at 310-11.
12 Id. at 311-12 (citing Kendel v. Pontious, 261 So. 2d 167, 169-70 (Fla. 1972)).
13 Id. at 311-13.
14 Id. at 307-10.
15 Id. at 314-15.
16 Id. at 316.
17 Id. at 317.
19 Id. at 317-18.
20 Id. at 318-19.
21 Id. at 322-23.
22 Id. at 323-24.
23 Id. at 324-25.
24 Id. at 325-26.
25 Id. at 326-27.
26 Id. at 327.
28 Id. at 328.
29 Id. at 328-29.
30 Id. at 326.
31 Id. at 328.
32 Id. at 313.
33 Id. at 313-14.
34 Id. at 319-20.
35 Id. at 320-21.
36 Id. at 321-22.
37 Id. at 329-32.
38 Id. at 332-35.
39 Id. at 335.
40 Id. at 335-36.
41 Id. at 336.
42 Id. at 336-38.
43 Id. at 338-39.
44 Id. at 339-40.
45 Id. at 340-41 (citing Seaboard Coast Line R.R. v. Burdi, 427 So. 2d 1048 (Fla. 3d DCA 1983)).
46 Id. at 341.
Dorothy F. Easley is former chair of the Appellate Practice Section, 2009-10, serves on the Business Law Section Executive Council, and is board certified in appellate law. She received her J.D., cum laude, from University of Miami School of Law with an emphasis on commercial law, and her M.S., summa cum laude, from SUNY/CESF in forest genetics. She is the founder of Easley Appellate Practice PLLC in Miami.
This column is submitted on behalf of the Business Law Section, Stephen E. Nagin, chair, and Mark Nichols, editor.