OPINION OF THE COURT
Friedman, J.Where a warrant to purchase stock is silent as to the effect of a reverse stock split on a warrant holder’s right to purchase shares of stock, must the warrant be deemed, after such a split, to reflect a proportional change in both the number of shares that may be purchased and the price of each share? We conclude that, in the absence of any evidence that the parties to a warrant contemplated otherwise, the warrant holder, because of the reverse stock split, is limited to purchasing shares proportionally adjusted as to both number and price.
This appeal arises from the authorization given on October 8, 1993, by the Board of Directors of defendant Financial Performance Corporation (Financial), to issue a warrant1 to Rebot Corporation, permitting Rebot to purchase 1,198,904 shares of Financial’s common stock at a price of 10 cents per share. The warrant was executed in consideration of a $187,328.79 loan that Financial was unable to repay to Rebot. On November 11, 1993, Financial’s Board also gave authorization to issue a warrant to Marvin Reiss (who was, at the time, a member of Financial’s Board and apparently Rebot’s President), permitting him to purchase 500,000 shares of stock at 10 cents per share. This warrant was issued as an honorarium payment for *15Reiss’ services on Financial’s Board. Both the Rebot and Reiss warrants provided that the right to purchase stock would extend for a period of five years until September 30, 1998 and August 31, 1998, respectively.
The actual warrants were not physically delivered to either Rebot or Reiss (collectively referred to as plaintiffs) until November 21, 1995, approximately two years after the warrants were originally authorized. However, as Reiss was a member of Financial’s Board of Directors and was also the President of Rebot, it is clear that plaintiffs were aware that the warrants had been previously authorized. Moreover, it is undisputed that, from the time that the warrants were authorized, Financial listed them on its books and records, as well as its filings with the Securities and Exchange Commission (SEC).
In August of 1996, at an annual meeting, Financial’s shareholders approved a one-for-five reverse stock split. As a result, each stockholder owned one fifth the original number of shares, with each share representing that amount of ownership previously represented by five shares of stock (see, 19 Fletcher, Cyclopedia of Corporations § 3:48, at 117-118 [perm ed]). Financial’s books and records, as well as its SEC filings, all reflected the change in the number of shares. The conversion of the outstanding warrants was also noted. Thus, Rebot was listed as being entitled to purchase 239,781 shares of stock (one fifth of 1,198,904) and Reiss was listed as being entitled to purchase 100,000 shares of stock (one fifth of 500,000). The exercise price of each share of stock was also converted to reflect the reverse stock split such that each share would now be exercisable at 50 cents instead of 10 cents.
Thereafter, on April 28, 1998, plaintiffs sought to partially exercise their warrants. In seeking to do so, plaintiffs asserted that they were entitled to purchase shares of Financial in accordance with the literal language of the warrants without adjustment for the reverse stock split. Financial, on the other hand, asserted that any right to purchase stock under the warrants had to be proportionally adjusted to reflect the reverse stock split.
The line in the sand having been drawn, plaintiffs commenced the instant action seeking a judgment (a) declaring that Rebot and Reiss remained entitled to purchase 1,198,904 and 500,000 shares of stock, respectively, at 10 cents per share, and (b) reforming the warrants to provide, respectively, for a new expiration date of October 31, 2000 and November 30, 2000. This latter cause of action was premised on the claim *16that, since there had been a two-year delay in physically delivering the warrants, the exercise period of the warrants should be concomitantly extended an additional two years. Plaintiffs also sought, via orders to show cause, to stay the expiration date of the warrants while the action was pending and disqualify Financial’s attorney. Financial cross-moved for dismissal of the action pursuant to CPLR 3211 (a) (1) and (7).
Supreme Court granted Financial’s cross motion and dismissed the action, finding that the warrants, by their specific terms, required an adjustment in the event of a reverse stock split.2 It appears that, in reaching this conclusion, the court relied upon certain warrant agreements in the record that contained express language regarding such a scenario. The court also denied as moot plaintiffs’ claims that there was a basis for reforming the expiration date of the warrants or for disqualifying Financial’s counsel.
Plaintiffs moved for reargument, pointing out that the warrant agreements the court relied upon did not relate to their warrants. Supreme Court granted reargument, and upon reargument, adhered to its prior decision. The court also imposed sanctions against plaintiffs.
We note at the outset that, contrary to the conclusion reached by Supreme Court, the warrants at issue failed to contain any contractual language dealing with the eventuality of a reverse stock split. It is apparent that the court improperly relied upon certain warrant agreements in the record that, although containing relevant language, were wholly unrelated to the warrants at issue. Hence, to the extent that the court relied upon such unrelated agreements, its reasoning was clearly erroneous. Nevertheless, for the reasons discussed below, we agree that plaintiffs’ complaint should be dismissed. We do not believe, however, that the imposition of sanctions was warranted as plaintiffs’ conduct was completely appropriate.
Analysis of the issue presented must begin with a detailed examination of Cofman v Acton Corp. (958 F2d 494 [1st Cir 1992]), a case bearing striking similarities to the instant case. *17In Cofman, plaintiffs were engaged in settlement negotiations of a prior suit with the defendant corporation. Plaintiffs were willing to settle the earlier action for $120,000 but sought an added “sweetener.” The parties ultimately agreed upon a “sweetener,” the value of which depended upon the price of a share of defendant corporation’s stock. The price of a share was to be determined as follows: “ The “price” on the Exercise Date shall be equal to the average closing price of one share of the common stock of [the corporation] on the American Stock Exchange for any period * * * consisting of thirty (30) consecutive trading days prior to the Exercise Date.’ ” (Supra, at 495.)
About one year later, defendant corporation executed a reverse stock split that resulted in each stockholder owning one fifth the original number of shares, with a concomitant increase in value for the new shares. A letter was then sent to the plaintiffs advising them of the reverse stock split and indicating that their settlement agreement would be deemed modified to reflect the split. The plaintiffs disagreed, contending that their agreement did not provide for any adjustment based upon changes in the structure of the stock. Since the parties could not agree on the value of the “sweetener,” litigation ensued.
At a trial focused on this issue, the plaintiffs argued that the price of one share of common stock must be taken to mean the price of one share as the shares were structured on the exercise date, not the price of one share of the defendant corporation’s common stock as the stock was structured when the agreements were made (Cofman v Acton Corp., 768 F Supp 392, 394). The plaintiffs also argued that the corporation accepted the risk of a reverse stock split by not insisting upon or even negotiating for a provision to deal with this eventuality (id.). The corporation asserted that the share of common stock referred to in the agreement plainly meant the form of common stock in existence when the agreements were signed, which required recognition of the reverse split to ascertain its value (id., at 394).
The trial court, finding that the parties had not considered the possibility of either a stock split or reverse stock split, held that the omission was an ambiguity in the agreement, and “resolved [the ambiguity] by concluding that the reasonable provision would have been that stock splits would have no effect” (958 F2d 494, 496, supra). The trial court thus concluded that the price of a share of stock, for purposes of the agreement, meant the form of a share at the time of the execution of *18the agreement. This approach required a proportional modification accounting for the reverse stock split.
On appeal the Court of Appeals for the First Circuit affirmed. In doing so, the court began with the observation that plaintiffs entered into the agreement as a “sweetener” to the their settlement, i.e., to provide them with the possibility of additional funds if the corporation’s business improved (id., at 495). The court next observed that, if plaintiffs’ construction of the agreement were accepted, an absurd result would follow. In this regard, if the agreement were read literally, as the plaintiffs urged, the corporation could have eviscerated any possibility of the plaintiffs benefitting from the agreement by simply declaring a stock split, as opposed to a reverse stock split (id., at 497). Stated otherwise, the corporation would be able to dilute the value of its stock to such an extent that the plaintiffs’ “sweetener” was valueless. This being so:
“ ‘It defies common sense’ that [plaintiffs] would have agreed that [the corporation] could effectively escape the specified consequences of a rising market price by increasing the number of shares. And if [plaintiffs] would not suffer from any increas [e in the number of shares], it would follow, since a contract must be construed consistently * * * [the corporation] should not suffer from any decreas [e in the number of shares]” (id.).
We find Cofman to be dispositive of the issue presented here by force of its logic, albeit not as a matter of stare decisis. In this connection, to accept plaintiffs’ interpretation of the contract, namely, that the warrants did not allow for a proportional adjustment to reflect a reverse stock split, would necessarily mean that the warrants also did not allow for a proportional adjustment if there were a stock split. Flowing from that reasoning is the observation that Financial, like the corporation in Cofman, could have eviscerated the value of plaintiffs’ warrants and escaped its contractual obligations by simply declaring a massive stock split instead of a reverse stock split. Here, as in Cofman, it defies all bounds of common sense to believe that plaintiffs could have ever intended such an outcome. This is especially so since, at least with respect to the Rebot warrant, the very purpose of the warrant was to provide satisfaction of a debt that Financial had been unable to pay. Rebot certainly did not intend to enter into an agreement that would permit Financial, if it so chose, to unilaterally extinguish its $187,328.79 debt. We therefore conclude that, *19just as plaintiffs should not suffer from the possibility of dilution of their warrants resulting from a stock split, so too Financial should not suffer from the consolidation of its shares resulting from a declaration of a reverse stock split (Cofman v Acton Corp., supra, cf., Restatement [Second] of Contracts § 204, comment c [1981] [a term can be supplied by logical deduction from the agreed terms and the circumstances of the making of the contract]). Any other conclusion would ignore the plain intent of the parties in issuing and receiving the subject warrants.3
Notwithstanding Cofman (supra), plaintiffs and the dissent assert that a literalistic approach to the interpretation of the warrants is compelled as a matter of law. We cannot agree. Surely a court is not required to disregard common sense and slavishly bow to the written word where to do so would plainly ignore the true intentions of the parties in the making of a contract. Such formalistic literalism serves no function but to contravene the essence of proper contract interpretation, which, of course, is to enforce a contract in accordance with the true expectations of the parties in light of the circumstances existing at the time of the formation of the contract (see, Aron v Gillman, 309 NY 157, 163; O’Neil Supply Co. v Petroleum Heat & Power Co., 280 NY 50, 55; see generally, Farnsworth, Disputes Over Omission in Contracts, 68 Colum L Rev 860). We point out that no one makes the claim that there is any other evidence to be offered on the issue of the parties’ expectations, other than what has been presented on this appeal. Nor does anyone claim that a trial is necessary to resolve any ambiguity.4
In any event, to the extent that the warrants may be viewed as not containing an implicit requirement for the proportional adjustment of Financial’s stock upon a split or reverse split, it means that the parties omitted what is undeniably an essential *20term of the agreement. Contrary to the dissent’s contention, a provision dealing with this eventuality is essential since it fundamentally affects both the number of shares that may be purchased and the price to be paid. In a circumstance where an essential term is omitted, section 204 of the Restatement (Second) of Contracts is instructive. That section provides:
“When the parties to a bargain sufficiently defined to be a contract have not agreed with respect to a term which is essential to a determination of their rights and duties, a term which is reasonable in the circumstances is supplied by the court.”
Here, following the Restatement approach, the only reasonable term would be the one consistent with the self-evident expectations of the parties when the warrants were executed, namely, a term requiring a proportional adjustment of both the number of shares that may be purchased and their price.5
Turning to plaintiffs’ reliance on Sanders v Wang (1999 Del Ch LEXIS 203, 1999 WL 1044880 [Del Ch Ct, Nov. 8, 1999]), a decision of the Chancery Court of New Castle County, Delaware, we find that this decision does not address the issue presented here and certainly does not require us to reach the conclusion advocated by plaintiffs. In Sanders, a corporation implemented a key employee stock ownership plan. The plan permitted the corporation “ ‘to grant up to 6,000,000 shares of Common Stock’ ” (1999 Del Ch LEXIS 203, at * 5, 1999 WL 1044880, at * 2) to enumerated executives assuming that certain price targets in the corporation’s stock price were achieved. In determining whether the price targets had been met, the plan specifically provided that the corporation’s compensation committee could adjust the stock price to account for any stock splits. However, the plan did not contain a *21similar provision allowing the committee to adjust the number of shares granted to account for any stock splits. When the conditions ripened for a grant of stock, the compensation committee took into consideration intervening stock splits, adjusted the 6,000,000 shares to account for the splits, and granted the specified executives 20.25 million shares of stock. The Sanders court held that the corporation’s action was unauthorized and that any grant of stock was limited by the 6,000,000 share ceiling (Sanders v Wang, 1999 Del Ch LEXIS 203, 1999 WL 1044880, supra).
Plaintiffs read Sanders for the broad proposition that, in any and all cases, where a contract fails to provide specific authorization for an adjustment of shares to reflect a stock split or reverse stock split, such an adjustment is unauthorized. Such a broad reading of Sanders is not, however, supportable.
As indicated, the contract in Sanders contained a provision specifically authorizing the consideration of stock splits with reference to determining price targets. Pointing to this fact, the Sanders court emphasized the conspicuous absence of a similar provision authorizing the consideration of stock splits with regard to the grant of shares. What becomes evident is that Sanders was addressing itself only to a situation where the contract explicitly contains a reference to stock splits in one section but omits such a reference in another. The court, therefore, was merely applying the maxim, expressio unius est exclusio alterius, meaning, the expression of one thing implies the exclusion of the other (Black’s Law Dictionary 602 [7th ed]) — it was not interpreting a contract that completely omitted any reference to stock splits, as is the case here. Thus, Sanders is of little, if any, analytical utility in determining the appeal before this Court. In any event, to the extent that Sanders may be read in the manner that plaintiffs suggest, we decline to follow it as we find the First Circuit’s decision in Cofman (supra) to be persuasive.
The decision of the Iowa Supreme Court in Smith v Stowell (256 Iowa 165, 125 NW2d 795), which is relied upon by the dissent, is similarly inapposite. In Smith, plaintiffs sold 10 shares of bank stock to defendant for $290 a share, reserving an option to repurchase the shares in the future for $305 a share, at a total cost of $3,050. Several years later, the bank issued a stock dividend of three shares of stock for each share held. As a result of the stock dividend, defendant became the owner of 40 shares of stock. Plaintiffs, seeking to exercise their option, asserted that they were entitled to purchase all 40 shares at *22the price of $3,050. Plaintiffs apparently argued that this result was required because defendant held the same proportional interest in the total outstanding stock both before and after the stock dividend. The court rejected plaintiffs’ argument.
In reaching its conclusion, the court pointed out that the option agreement specifically provided that plaintiffs were only entitled to repurchase the very 10 shares they had sold to defendant (id., 256 Iowa, at 169, 125 NW2d, at 797). This being so, there could be no interpretational basis entitling plaintiffs to purchase stock subsequently acquired by defendant as a result of a stock dividend. Smith, therefore, provides no guidance in this case since it involved an agreement that, in unequivocal terms, specifically limited the plaintiffs’ right to purchase stock.
Two further observations regarding Smith are appropriate. First, it appears that Smith is no longer the law in Iowa (see, Lamp v American Prosthetics, 379 NW2d 909, 910 [Iowa]). Second, Smith involved a stock dividend, not a stock split. There is, therefore, a serious question as to whether the reasoning of Smith could, under any circumstances, have any applicability here (see generally, Matter of Fosdick, 4 NY2d 646, 653 [discussing the legal distinction between stock splits and dividends]).
Finally, as to plaintiffs’ claim for reformation of the expiration dates of the warrants, we find such claims to be without merit (see generally, Nash v Kornblum, 12 NY2d 42; see also, Barclay Arms v Barclay Arms Assocs., 74 NY2d 644). We note in this regard that, notwithstanding the late delivery of the actual warrants, plaintiffs were at all times aware of their existence and never sought to compel their physical delivery. Nor is there any indication, or even an allegation, that plaintiffs ' desired to exercise their right to purchase stock before the time the warrants were physically delivered. Moreover, plaintiffs present no foundation for their vague allegations of fraud and mutual mistake.
We have examined plaintiffs’ remaining contentions and find them to be unavailing.
Accordingly, the order of the Supreme Court, New York County (Charles Ramos, J.), entered September 22, 1998, which, inter alia, granted defendant’s cross motion to dismiss plaintiffs’ complaint, should be modified, on the law, to the extent of issuing a declaration in defendant’s favor, and otherwise affirmed, without costs. Order, same court and Justice, entered December 18, 1998, which granted plaintiffs’ *23motion to reargue, and upon reargument, imposed sanctions on plaintiffs, and otherwise adhered to the September 22, 1998 order, should be modified, on the law and the facts, to the extent of vacating the sanctions imposed, and otherwise affirmed, without costs.
. A warrant is a contractual obligation “ ‘entitling the owner to buy a specified amount of stock at a specified time(s) for a specified price’ ” (Gandal v Telemundo Group, 781 F Supp 39, 41, n 1 [revd on other grounds 997 F2d 1561], quoting Black’s Law Dictionary 1422 [5th ed 1979]; 19 Fletcher, Cyclopedia of Corporations § 2:60, at 83 [perm ed]).
. We note that, although the cross motion for dismissal was brought pursuant to CPLR 3211 (a) (1) and (7) and could properly be resolved under these paragraphs, it was, and is, equally appropriate to resolve the cross motion as having been a request for summary judgment pursuant to CPLR 3212. Significantly, all parties laid bare their proof and deliberately charted a summary judgment course (see, Mihlovan v Grozavu, 72 NY2d 506, 508; Four Seasons Hotels v Vinnik, 127 AD2d 310, 320). Moreover, in a reply affidavit dated July 1, 1998, plaintiff Reiss specifically recognized that the court might treat the cross motion as one seeking summary judgment.
. We need not decide whether the same rule should apply to publicly tradeable securities (see, Cofman v Acton Corp., 958 F2d 494, 497, n 5, supra; see also, Parkinson v West End St. Ry. Co., 173 Mass 446, 53 NE 891). Suffice it to say that plaintiffs concede (and in fact advocate) that the warrants at issue here were merely private contracts that, by their terms, could not be transferred or publicly traded.
. Although certainly not dispositive, plaintiffs themselves seemingly recognized the lack of logic inherent in their position. Thus, at oral argument plaintiffs were forced to concede that, had there been a stock split as opposed to a reverse stock split, they would have asserted a contrary position to that which they presently advocate and would have argued that the parties did not intend that Financial be able to dilute its stock to the point of rendering the warrants valueless.
. Although plaintiffs’ brief on this appeal alleges that plaintiff Reiss specifically advised defendant that he would not accept warrants containing a provision to deal with a reverse stock split, this allegation is contradicted by the record. The affidavit of plaintiff Reiss submitted at Supreme Court, and upon which the brief apparently relies, merely indicated that Reiss would not accept warrants containing language that the warrants were subject to a separate agreement. Contrary to the conclusion reached by the dissent, this vague allegation hardly supports the view that the parties contemplated the eventuality of a stock split and, significantly, even though this was the central issue before Supreme Court, Reiss did not aver that the subject of stock splits was ever contemplated. At best, Reiss’ allegation was an assertion that the parties intended the warrants to represent the full understanding of the parties. However, even if the parties intended the warrants to embody their full understanding, the fact remains that the warrants fail to contain any overt guidance on the issue of stock splits.