Implied terms; contextual terms; gap fillers Flashcards
What is a rule of interpretation?
How we determine a contract’s meaning, the parties’ rights and obligations, and to determine whether the contract itself is ambiguous. Trying to interpret words and context to see if there is an ambiguity.
What are canons of construction?
What we use to resolve irreconcilible ambiguities once the actual intent of the parties prove impossible to unwind. Building/constructing a contract where it is too ambiguous.
What kind of theory does contracts operate under in determining intent?
objective; based on words or conduct.
What is subjective intent?
The actual intent, meaning, or objective of one of the parties, whether uncommunicated or inadequately communicated.
What is objective intent?
The intent/meaning of a reasonable person in a similar position, and with similar knowledge, based on public words and conduct.
List the names of the 3 exceptions to the objective theory of contracts.
- The peerless rule
- Same subjective interpretation
- One party knows of the other’s different interpretation
What is the peerless rule?
Where both parties attach a different, yet equally reasonable interpretation to their expressoins, no contract is formed
What is the same subjective interpretation rule?
If both parties subjectively attach the same meaning to a term, that meaning will govern even if it is not a reasonable meaning.
What is the one party knows of the other’s different interpretation rule?
If A knows that B attaches a certain meaning to an expression, and B does not know A attaches a different meaning to the same expression,then the meaning that B attaches to the expression will prevail even if, under a strictly objective test, A’s meaning is more reasonable.
What is the general rule for party-supplied terms?
Contractual liability begins with the actual words of the contract.
What is the four corners/plain meaning rule?
Where the lanuage of a contract is unambiguous on its face, and no special meaning is attached by custom or usage, the plain language of the terms control.
Is strict plain meaning the modern approach?
no, but the document’s words are still the starting point
What is extrinsic evidence?
Evidence relating to a contract but not appearing on the four corners of the contract because it comes from other sources involving the context in which the parties negotiated the contract.
What are the three context-supplied terms listed in hierarchy?
- Course of performance
- Course of dealing
- Usage
What is course of performance?
Evidence about how the parties have performed this contract in the past wthout the other party’s objection
What is course of dealing?
Evidence about how the parties have performed past contracts.
What is usage?
custom or habitual practice regularly used/observed in a trade or industry.
What are court-supplied terms?
Terms implied and enforced by the court
What is the reasonable efforts implied term?
When a party grants exclusive rights to another under the contract, an implied promise to use reasonable efforts is recognized where the parties didn’t think to include the obligation.
When is the implied covenant of good faith and fair dealing breached?
When a party acts in a manner that would depirve the other party of the rights to receive the benefits of their agreement
What is encompassed in the implied covenant of good faith and fair dealing?
Any promises which a reasonable person in the position of the promisee would be justified in understanding were included
When can the implied covenant of good faith and fair dealing not be applied?
Where it would be inconsistent with other terms of the contractual relationship
What is an example of the implied covenant of good faith and fair dealing not applying?
If a defendant is give the right to do what they did by the express provisions of the contract, then there can be no breach of the covenant of good faith and fair dealing.
Enhanced Athlete v. Google: The youtube steroids case
What are legislature supplied terms?
state enactments of the UCC
