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Interpretation II Contracts – Prof. Merges March 17, 2011
Frigaliment Importing Co.
“The issue is, what is a chicken?”
Differing interpretations π : Δ :
Differing interpretations π : Young, suitable for broiling and frying Δ : Any bird of the chicken genus which meets K specifications
K Terms Different grades and weights “Scheduled” = shipment date FAS -- ?
K Terms Different grades and weights “Scheduled” = shipment date FAS – “Free along side” [the ship or railhead]; risk of loss provision
How does Judge Friendly begin the task of interpreting the K?
Starts with the “the K itself” to see if it “offers any aids to interpretation” p. 576 top
What interpretive arguments did each party make? π : Δ :
“trade usage” argument – p. 576 What is “trade usage”? Why did π argue this here?
π’s expert witnesses What was the force of their testimony? What quibbles did the court find with it?
Δ’s counter-arguments Experts; Government regulations Why relevant? “Grade A, Gov’t inspected” term
Price argument What is it? P 578
Burden of proof Why does π have the burden of proof on the meaning of “chicken”?
Burden of proof Why does π have the burden of proof on the meaning of “chicken”? It is the one seeking recovery...
What was π’s waiver argument?
The litigation cancellation clause was for its sole benefit; so it could waive if it wanted to...
Why does the court reverse on the waiver issue? “Extrinsic” evidence improperly admitted to create an ambiguity Expressed agreement paramount over later evidence of “intent”
Gap-filling Dickey v. Phil. Minit-Man Facts Procedural History
Implied obligations? Recall 2-207
Hurst v Lake Trade usage to interpret K terms What does “$50 per ton” mean? How about “at least 50% protein”?
Nanakuli Paving History
Nanakuli Paving History NB: JNOV, JMOL – reversing jury verdict
Issues Price protection Motivation? Oil shock of 1974
Nanakuli’s arguments Price provisions do not quite mean what they seem to mean Trade usage Course of performance
Trade usage Binding on the parties if established Nanakuli established here
Course of performance What is it? Evidence here? When admissible?
Waiver vs C of P What is the difference? Holding here – p. 415
Were express terms consistent with usage/c of p? Here – yes Why? – p. 417 Good faith
Colfax Envelope Issue Ambiguity Rescission vs. “gamble on winning”
P. 430 Do you buy this analysis? Latent vs patent ambiguity Assumption of risk analysis...
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