In the realm of contract law, where every word carries weight and every clause holds significance, the choice between written numbers and numerals might seem like a trivial matter. However, this seemingly inconsequential detail can become a focal point in contract disputes, often with significant ramifications for the parties involved. Surprisingly, in many jurisdictions, it's the written numbers that prevail over numerals when inconsistencies arise. Let's delve into why this is the case and why meticulous attention to detail matters in the drafting and interpretation of contracts.
At first glance, it might appear arbitrary whether one chooses to express a numerical value as "five" or "5" in a contract. After all, both convey the same underlying quantity. However, the legal principle dictating that written numbers take precedence over numerals in contract interpretation is grounded in the importance of clarity and precision in legal documents.
"If an instrument contains contradictory terms, typewritten terms prevail over printed terms, handwritten terms prevail over both, and words prevail over numbers." (Uniform Commercial Code Section 3-114, Tennessee Code Section 47-3-114)
One of the fundamental tenets of contract law is the intention of the parties. Courts strive to ascertain and enforce the mutual intentions of the contracting parties when disputes arise. However, ambiguity in contractual language can hinder this process, leading to prolonged litigation and uncertainty.
The preference for written numbers stems from their inherent clarity. (This interpretation is echoed across the country when each State is asked to interpret a contract dispute.) When a number is spelled out, it leaves little room for interpretation or ambiguity. For instance, the term "five hundred dollars" unequivocally refers to the numerical value of $500. On the other hand, the numeral "500" might be subject to misinterpretation or confusion, particularly if it's presented alongside other numerals or in contexts where precision is paramount.
Consider a scenario where a contract stipulates a payment of "5,000 dollars" for services rendered. In the event of a dispute over the payment amount, if one party contends that the agreed-upon sum was $500, while the other party insists it was $5,000, the written expression provides clarity and certainty. The court would likely uphold the interpretation that aligns with the written figure, given its explicitness and lack of ambiguity.
Moreover, the preference for written numbers serves to promote consistency and uniformity in contract interpretation. Unlike numerals, which can vary in appearance and formatting (e.g., "5," "5.00," "5"), written numbers adhere to standardized linguistic conventions. This consistency facilitates easier comprehension and reduces the likelihood of misunderstandings or disputes arising from numerical representations.
It's worth noting that while the principle of written numbers prevailing over numerals holds sway in many jurisdictions, there may be exceptions or variations based on specific legal doctrines or contractual conventions. Therefore, parties drafting contracts should be cognizant of the applicable laws and norms governing contract interpretation in their jurisdiction.
While it may seem trivial, the choice between written numbers and numerals in contract drafting carries significant implications for contract interpretation and enforcement. By opting for clarity and precision through the use of written numbers, parties can mitigate the risk of ambiguity and facilitate smoother resolution of disputes. In the intricate tapestry of contract law, every word matters, and the power of the written word, especially when it comes to numbers, should never be underestimated.
As an attorney with years of experience working with contract and real estate related matters, I am here to help answer your questions and ensure your closings go smoothly.
I hope that you found this informative. If you feel that this information may help you or a client, please reach out. It is my mission to help others.
Jeremiah L. McGuire
Attorney
Memphis, TN
901-494-1622
jeremiah@harkavyshainberg.com