Interpreting terms of the contract

Question 1

Frigaliment Importing Co. v. B.N.S International Sales Corp
Intro to the source of meaning

Answer 1

Brief Facts: Plaintiff purchased chicken wanting young chicken. The defendants gave them older chickens. The plaintiffs sued for not getting younger chicken.
Abstract question: What do courts consider in interpreting if there is an ambiguous word in a contract?
Abstract rule: A court will utilize the surrounding content of the contract, industry norms, and third-party standards to specify an ambiguous term of a contract.

Question 2

Questions to answer in a hypothetical.

Answer 2

The issue is, what the rule is, and how we are applying the rule to the facts. Conclude by answering the issue statement.

Question 3

Fair and equitable under the circumstances

Question 4

Waiver or modification? What is the analysis?

Answer 4

When you start modifying multiple terms of the contracts, you are in modification territory. Waivers usually occur when there is a change in one or a couple of terms.

Question 5

Reinstatement of terms in waiver situations rule:

Answer 5

Waiver, original terms can be reinstated with notice

Question 6

Goals for today

Answer 6

Explain and distinguish between common law rules regarding external sources of meaning, including the course of dealings,

Question 7

Interpretation

Answer 7

What have the parties agreed to?

Question 8

Question in considering the interpretation of the terms of the contract

Answer 8

Should the court consider a discount integrated into a long-term contract?

Question 9

Hierarchy:
- Course of performance
– How these parties interact with each other
- Course of dealings
– How they have been dealing with people before
- Trade usage
– Market standings and general practices

Answer 9

Things to consider when there is ambiguity in a term of the contract

Question 10

Common Law rule (RST 202 (5)

Answer 10

Wherever reasonable the maniefestiations of intention of the parties to a promise or agreement are interpreted as consistent

Question 11

Are express terms clear? Does the rest of the contract help? Do the surrounding negotiations provide clarity? Is the course of performance instructive? Is the course of dealings instructive? Is trade usage instructive?

Answer 11

Framework for terms of the contract interpretation.

Question 12

Mutual mistake elements:

Answer 12

Was there a mistake at the time of the contract, was it related to a basic assumption of the contract, does it have a material impact, Is it a mutual mistake?

Question 13

Restatement 223 for Course of Dealings

Answer 13

Course of dealings: a course of dealing is a sequence of previous conduct between the parties to an agreement which is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct (RST 223)

Question 14

Background for the course of dealing
1. multiple contracts
2. beyond the mere sale of goods
3. operation: an admission?
4. Previous contract similar to the present contract
5. If consistent dealings in the past court may rule past conduct established an agreement of duties expected under the present contract.

Question 15

Framework for course of dealings

Answer 15

1) Do the parties have repeated instances of conduct under multiple contracts?
2) Were the contracts similar to the present contract?
3) Were the contracts consistent?
4) Is the proposed interpretation reasonably connected to the terms?

Question 16

NanaKuli Paving and rock v. Shell Oil Co.

Answer 16

Brief facts: Plaintiff was suing for breach of contract because there was an implied price protection against the defendant’s price increase.
Abstract question: How do the courts determine broad words in a contract?
Abstract rule: A court will consider the government’s response to an issue, the market itself, and the change in personnel of one of the parties in deciding an ambiguous term.

Question 17

Restatement 202

Answer 17

Where an agreement involves repeated occasions for performance by either party with knowledge of the nature of the performance and opportunity for objection to it by the other, any course of performance accepted or acquiesced in without the objection is given great weight in the interpretation of the agreement.

Question 18

The course of a performance framework

Answer 18

1. Do the parties have repeated instances of conduct under one contract?
2. Have the performances been consistent
3. Is the proposed interpretation reasonably related to the terms.

Question 19

Elements of Course of a Performance Framework

Answer 19

1) Repeated instances under one contract
2) Consistent performance
3) Reasonable interpretation based on the terms.

Question 20

Fisher v. Congregation Bnai Yitzhok

Answer 20

Brief facts: Rabi agrees to do a couple of religious celebrations for a synagogue under the orthodox norms of the Jewish Faith. The Synagauge switches seating practices based on gender and the Rabi refuses and sues.
Abstract question: Is an established custom that’s not written in a contract a term of the contract?
Abstract rule: A custom that is widely accepted for the context of an agreement can merit a term of the contract.