Unsure of Your Rights? Try a Declaratory Judgment Action

There are times when parties are just uncertain of what they are allowed, and not allowed to do, going forward. It would be nice if parties could come to court, and have a judge determine who is correct or incorrect, so that the parties could adjust their future behavior in a way that is legal, and avoids legal problems.

It turns out there is such an action, which allows parties to direct or alter their future behaviors, where there is a genuine dispute over the rights and obligations of the parties. It’s called declaratory judgment.

What is Declaratory Judgment?

Declaratory judgment asks the court to tell parties who have different or opposing interpretations of their rights, which party’s interpretation is right and which party is wrong.

This can happen when a law is written unclearly or ambiguously, and parties have a dispute over what their rights or responsibilities are going forward, under that law. It can also happen when there is a contract, and the parties have differing interpretations of the agreement, so they ask the court to clarify or interpret the contract, so the parties can direct their future behavior accordingly.

Not Just an Advisory Opinion

It’s not always just about winning a declaratory judgment case. Sometimes it’s about getting a court to agree to hear the case and determine the parties’ rights, in the first place.

That’s because generally, courts cannot give advisory opinions, or rule on hypothetical situations. A court cannot tell parties how to direct their future behavior, in order to avoid legal trouble. That’s just giving legal advice which your business lawyer can do, but a court cannot. Courts aren’t there to give anybody legal advice or direction.

That means that you often will have to convince a court that in your declaratory judgment action, it isn’t just giving legal advice–it’s ruling on an actual, bona fide dispute by parties over their rights.

There must be some dispute between the parties as to their rights–parties can’t just ask the court to interpret a law or a contract out of, say, curiosity.

So, for example, if a law said that “no businesses that violate the public morale” are allowed in an area of a city, and you wanted to start a business that the city thought violated that law, you might have to file a declaratory judgment action, to see if your business does or doesn’t, in fact, qualify as “violating the public morale.”

Insurance contracts are often subject to declaratory judgments, when the insurance company claims that a loss or lawsuit falls under a policy exemption, and thus refuses to insure the loss, but the insured disagrees, leading to a declaratory judgment lawsuit between the insurance company and the insured, over the meaning and interpretation of the insurance contract.

No Money Involved

Winning your declaratory judgment case, usually doesn’t win you any money directly. But it can clarify your rights and allow you to direct your future behavior–or get another party to stop threatening you with litigation.

Questions about your legal rights? Call our Fort Lauderdale business litigation attorneys at Sweeney Law P.A. at 954-440-3993 for help.

Sources:

investopedia.com/terms/d/declaratory-judgment.asp

15thcircuit.com/sites/default/files/court-admin/law-library/forms-download/Declaratory-Judgment-Packet-11-07-2022.pdf