Implied terms; contextual terms; gap fillers

Question 1

What is a rule of interpretation?

Answer 1

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.

Question 2

What are canons of construction?

Answer 2

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.

Question 3

What kind of theory does contracts operate under in determining intent?

Answer 3

objective; based on words or conduct.

Question 4

What is subjective intent?

Answer 4

The actual intent, meaning, or objective of one of the parties, whether uncommunicated or inadequately communicated.

Question 5

What is objective intent?

Answer 5

The intent/meaning of a reasonable person in a similar position, and with similar knowledge, based on public words and conduct.

Question 6

List the names of the 3 exceptions to the objective theory of contracts.

Answer 6

1. The peerless rule
2. Same subjective interpretation
3. One party knows of the other’s different interpretation

Question 7

What is the peerless rule?

Answer 7

Where both parties attach a different, yet equally reasonable interpretation to their expressoins, no contract is formed

Question 8

What is the same subjective interpretation rule?

Answer 8

If both parties subjectively attach the same meaning to a term, that meaning will govern even if it is not a reasonable meaning.

Question 9

What is the one party knows of the other’s different interpretation rule?

Answer 9

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.

Question 10

What is the general rule for party-supplied terms?

Answer 10

Contractual liability begins with the actual words of the contract.

Question 11

What is the four corners/plain meaning rule?

Answer 11

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.

Question 12

Is strict plain meaning the modern approach?

Answer 12

no, but the document’s words are still the starting point

Question 13

What is extrinsic evidence?

Answer 13

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.

Question 14

What are the three context-supplied terms listed in hierarchy?

Answer 14

1. Course of performance
2. Course of dealing
3. Usage

Question 15

What is course of performance?

Answer 15

Evidence about how the parties have performed this contract in the past wthout the other party’s objection

Question 16

What is course of dealing?

Answer 16

Evidence about how the parties have performed past contracts.

Question 17

What is usage?

Answer 17

custom or habitual practice regularly used/observed in a trade or industry.

Question 18

What are court-supplied terms?

Answer 18

Terms implied and enforced by the court

Question 19

What is the reasonable efforts implied term?

Answer 19

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.

Question 20

When is the implied covenant of good faith and fair dealing breached?

Answer 20

When a party acts in a manner that would depirve the other party of the rights to receive the benefits of their agreement

Question 21

What is encompassed in the implied covenant of good faith and fair dealing?

Answer 21

Any promises which a reasonable person in the position of the promisee would be justified in understanding were included

Question 22

When can the implied covenant of good faith and fair dealing not be applied?

Answer 22

Where it would be inconsistent with other terms of the contractual relationship

Question 23

What is an example of the implied covenant of good faith and fair dealing not applying?

Answer 23

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

Question 24

What are legislature supplied terms?

Answer 24

state enactments of the UCC