THE 4 CORNERS RULE FOR CONTRACT DISPUTES

One thing to keep in mind when it comes to contract disputes is that judges will typically reduce the dispute to the lowest common denominator, that is, they鈥檒l narrow the issues to be as simple as possible. Judges do this by finding any excuse to limit the issues to what the written contract actually has in it. This is known as 鈥淭he Four Corners Rule.鈥

This doctrine states that a court will not look outside of the four corners of the contract document itself to determine what the parties鈥 duties are under the contract. As explained in Krauss v. Utah State Dept. of Transp., 852 P.2d 1014 (Utah App. 1993) 鈥淐ourts first look to the four corners of the agreement to determine the intentions of the parties.鈥 Court will deviate from the four corners of the document only if the contractual language is found to be ambiguous. The Krauss court explained that 鈥淟anguage is ambiguous if the words used to express the intent of the parties are insufficient so that the contract may be understood to reach two or more plausible meanings. Upon finding a document ambiguous, a court may utilize extrinsic evidence to clarify the contractual intent of the parties. Where extrinsic evidence is insufficient to show the parties鈥 intent, courts, as a last resort, construe ambiguous terms against the drafter.鈥

Courts do not go out of their way to find ambiguity in contracts because it muddies the waters. Instead, courts look to the plain language of the contract and if it makes sense the court will apply it as is. Parties to a contract dispute would be wise to narrow the issues down themselves to expedite the case and the trial. At Salcido Law Firm our attorneys do exactly that. Utah courts appreciate it when parties and their lawyers focus on the relevant issues. Give us a call at 801.413.1753 for a free consultation regarding your contract dispute.