Understand Before You Sign on the Dotted Line

A recent case before the United States Court of Appeals held an employment agreement is enforceable, even when one party to the contract is ignorant of the language in which the agreement is written. A Spanish speaking employee of a general contractor entered into an employment agreement requiring any disputes arising out of the agreement be arbitrated. After being terminated by the general contractor, the employee brought a lawsuit in the District Court of the United States. The trial court found that the employee could not be bound by the arbitration provision of the contract, because the contract was written in English, a language the employee did not understand. As a result, the lower court reasons that the employee never assented to the arbitration provision of the contract. The appellate court reversed the decision, stating that acceptance of a contract is measured not by a parties’ subjective intent, but its outward expressions of the assent. Essentially, when a party executes a contract, the party is assumed to understand all the provisions contained within the contract. In order to preserve the integrity of contracts, a party cannot claim to have not read a portion of a contract and thereby be relieved of its binding effect.

On a practical note, before entering into a contract, be certain you understand all of the provisions of the contract. Further, despite representations by the opposing party as to the contract provisions, make sure you have read and understand the contract. For additional questions, please contact Michael W. Siri at siri@bowie-jensen.com.

Virginia Graeme Baker Pool and Safety Act in Maryland

On December 19, 2008, the Virginia Graeme Baker Pool and Spa Safety Act (“Graeme Baker Act”) took effect nationwide, including Maryland, imposing a federally mandated requirement for suction entrapment avoidance. The Graeme Baker Act promotes the safe use of pools, spas, and hot tubs by requiring the following: 1) all manufactured safety drain covers must conform with the American National Standard ASME A112.19.8 – 2007 Suction Fittings for Use in Swimming Pools, Spas, and Hot Tubs published by the American Society of Mechanical Engineers (“ASME”); 2) all new and existing public pool drain covers must be equipped with the conforming drain covers; and 3) all new and existing public pool with a single main drain should be equipped with additional preventative suction entrapment devises meeting applicable ASME standards. Pools that will open in the summer of 2009 are not required to comply until the pool is opened. They can only open when they are in compliance. Public pools currently in use, however, must comply with the Graeme Baker Act. This Act has wide ranging ramifications related to insurance, private pools, applicable standards of care, contract langauge and workmanship. For further information, please contact Michael W. Siri at siri@bowie-jensen.com.

Liquidated Damages Provision

Many construction contracts contain liquidated damages provisions. A liquidated damages provision is where the parties to the contract agree to a fixed sum as damages for the breach by one or both of the parties. It is a common misunderstanding, that the party making a claim for breach of contract must prove that they were damaged in order to recover under a liquidated damages provision. Under Maryland law, however, where a valid liquidated damages clause exists, a party need only prove a breach of the contract. Proof of damages is not required. Theoretically a party who has not suffered actual damages because of another party's breach may still recover damages under a liquidated damages provision. For further information, please contact Matt Hjortsberg at 410-583-2400 or Hjortsberg@bowie-jensen.com