Blocked Payments and Sanctions Clauses in Florida Contract Disputes

A sanctions blocked payment contract dispute turns on three things: the contract’s wording, the facts of the payment, and the forum the parties chose. This guide explains those pieces in plain terms for businesses in Tampa, Hillsborough County and the wider Tampa Bay area.

What Is OFAC and Who Has to Follow Its Rules?

OFAC is the Office of Foreign Assets Control, an office within the U.S. Department of the Treasury that runs U.S. sanctions programs. These programs target certain countries, regions, companies and individuals.

So the first question is direct. Is any party to the payment, or any bank in its path, a sanctioned person or located in a sanctioned area? Florida businesses that send or receive money through U.S. banks should ask this early.

What Are Blocking Sanctions and What Does a Blocked Payment Mean?

The handling differs, so the bank’s notice matters. Read it closely and note exactly which word the bank used.

Your bank may hold the funds in a blocked account while the sanctions question is worked out. Plan cash flow with that delay in mind.

What Happens to Funds After They Are Blocked by OFAC?

Pause and check before you retry.

A specific license is a formal permission from the regulator for an activity that would otherwise be barred.

How long a hold lasts depends on the facts of the case. Keep a written log of every bank notice, every date and every message from the other side while the funds are held.

Does a Sanctions Block Excuse Payment or Performance Under the Contract?

Not automatically. This matters most when the party owed money had no link to the sanctioned person.

Consider a Tampa supplier that delivered goods to a buyer. A bank in the payment chain flags the buyer’s wire because a name matches a sanctioned party. The buyer then says sanctions excuse payment. The supplier was not sanctioned. The real questions are what the contract says and whether the sanctions rule actually barred that payment.

Florida contract basics still apply. An oral contract must have an offer, acceptance, consideration and enough detail on essential terms, according to St. Joe Corp. v. McIver. When an express contract covers the same subject, a claim for unjust enrichment generally cannot rest on that same relationship, as Williams v. Johnson explains. A payee may need to frame its claim under the contract itself.

How Are Sanctions Clauses and Force Majeure Clauses Read?

The exact wording of these clauses drives most of the analysis. A sanctions clause may allow a party to suspend, withhold or end performance when sanctions apply. A force majeure clause is a separate promise that may or may not list sanctions as an excused event.

Start with these questions. Who does the clause cover? Does it allow withholding payment, or only termination? Does it require written notice, and within what time?

Notice matters. A party that skips the notice or mitigation steps its own clause requires may face arguments that it cannot rely on that clause.

Timing matters too. Under Florida law, ratification occurs when a party entitled to rescind a voidable contract fails to do so after learning the facts that justify rescission, as Flaherty v. Flaherty states. Act soon after you learn the facts, and write down what you knew and when.

Clauses can also be challenged for unfairness. Florida courts look at how a term was made and how unfair it is. Both must be present, though not to the same degree, under Basulto v. Hialeah Automotive.

When Can a Blocked-Payment Dispute Proceed in Court or Arbitration?

The contract’s dispute clause usually decides the forum. If the contract requires arbitration, a written arbitration provision in a contract involving commerce is valid and enforceable. The exceptions are grounds that exist at law or in equity for revoking any contract, or as otherwise provided in chapter 4 of the Act, under 9 U.S.C. § 2. A federal court hearing a lawsuit on an issue that is referable to arbitration under a written agreement must, on a party’s application, stay the trial until arbitration is done, provided the applicant is not in default in proceeding with such arbitration, under 9 U.S.C. § 3.

Florida’s arbitration statute works on similar lines. Under Fla. Stat. § 682.02, the court decides whether an arbitration agreement exists. Under Fla. Stat. § 682.03, a court may not refuse to order arbitration just because the claim lacks merit.

If the contract has no arbitration clause, venue rules come into play. Under Fla. Stat. § 47.011, actions are brought in the county where the defendant resides, where the cause of action accrued, or where the property in litigation is located. That section does not apply to actions against nonresidents.

Mediation is another path. The American Arbitration Association’s mediation resources state that mediation can resolve cross-border commercial disputes involving international contracts. Your matter may be referred to another lawyer or law firm.

What to Do Now If a Payment or Contract Obligation Is Blocked

Start by collecting the contract, every payment record, all bank notices and every message about the block. Keep the originals and note the date each one arrived.

Identify the exact clause the other side relies on. Note the date it gave notice, and check whether your own contract required you to send notice.

Review every statement before it goes to the bank, the counterparty or any regulator. A short message can lock in a position you did not intend to take.

Common Questions

Outcomes in these disputes often depend on the contract language and the facts of the payment.