SCHLEGEL! Spring 2011
2/3/11
· Law starts in contracts and ends in bankruptcy, in between we do a lot of arguing about money
o People doing things for allegedly voluntary/punitary gain
· FRIGALIMENT IMPORTING CO. (Chicken Case = question of knowledge/good faith)
o PP: To understand substance, must know procedural posture!
§ Trial level since at district court, they’ve heard evidence, issuing decision
o 2d page, chicken is “ambiguous, different meaning between different people
o Agreements are possibly facts in the world in which contracts are written
§ Can be written or verbal
o Business transactions: expected to have some knowledge, under what rubric was this classification talked about by the judge
§ One source they mention is USDA Regulations, based also on language in the contract and word usage to determine intent of parties
§ Trade Usage of term is designed to answer the usage question
o How would you weigh the trade usage? Evaluate testimony of witnesses
§ Weight? Credibility, look at their dealings
§ P=Strasser: Large buyer, negotiates deals between NY & Swiss companies
· Here, Stov must be a middle man, just buying and selling
§ P=Niesielowski: seller/officer/supplier of check, a step away from the parties
§ P=Dates: Employee of poultry trade, 2 or 3 steps away from transaction
§ D=Weininger: Operates chicken eviscerating plant, chicken is everything but turkey, duck, or goose
· Relationship to trade, guts chickens = he doesn’t care if they are boilers, fryers or stewers, doesn’t pay attention to the chickens
§ D=Sadina: Food inspector, makes sure food meets regulation, would verify meats
§ P’s witnesses probably more reliable, but they specify when they buy!
o Assuming both companies are acting in Good Faith when making the contract, buyer would check with others before purchasing, $33/lb. is about right for stewer
o Bauer: noob, no experience as new to the trade
§ How to build a business? Eat a few cents and create relationships
o Communication/language between the parties is a breakdown throughout ordeal
o Seller, second cable he distinguished broiler and chicken, Good Faith?
§ Chicken is something else other then broiler according to the table
o Bauer did ask Stov to specify to the type of chicken, he replied “any type”
§ Stov would get a commission in swiss francs as worked for Czech gov’t
o Assumption of good faith is plausible!
o Bauer bought from Niesielowski, who asked twice about the kind of chicken so he was suspicious
§ “Knew, or should have known” classic phrase for knowledge in law
· What gets proven and what seller should have known/good faith
o Contract construction is for the court, unless the language is ambiguous
o AMBIGUOUS(conclusions, not premise)
§ YES? – Testimony – Yields Argument
§ NO? – Argument
o Argument is whether or not the testimony proves a particular means
· ANY CASE WORTH LITIGATING, BAD FAITH IS WHAT TIPS THE SCALE
o Using notion of bad faith to establish direct of which ambiguous terms construed
o Want to show “that person acted in bath faith without ever uttering those words”
§ Switch will then go on or off (yes or no)
2/8/11
· OUTLET EMBRIODERY (How business men would read them)
o Letters between P and D were from one merchant to another, they are to be read as business men would read them
o Court supplies meaning if it’s a matter of law or question in fact, not general
o Ambiguous language again, how to understand tariff
o Also good/bad faith but set aside
§ Assume business people didn’t act appropriately because the seller backed out, they were responsible for creating the tariff language
§ Now, seller is arguing that there is no contract, saying “the contract that I created is not complete because the price was not fixed”
· Cardozo: Bad behavior junior!
§ Buyer(GF) of courts I have no problem is price increases b/c of tariff
· AND already had business dealings, “Avoid last season’s delays”
· HURST V. LAKE & CO. (Like chicken, dealing w/ meaning of custom terms)
o Ambiguity in how trade terms understood, look at custom of trade to decipher
o ALSO, like chicken case because testimony had been heard
o We don’t know what good faith is, just its absence, much like (un)reasonable, subjective/objective, (un)ambiguous, etc.
§ Importance is what is going on, no on exact meanings of term
o Letter said ambiguous to “less than 50%” as trade custom, includes 49.5%!
o Since no evidence had been discovered, case would have to be sent back to trial
o Hard to determine wha
on here” is the center of the course,,, THUS facts, facts, facts, facts
· HARDWARE WHOLESALERS INC. V. HEATH
o Majority says not clear on contract what his “guaranty” means
§ Document missing here, a pleading error on part of the P
· What was the “telephone conversation” that happened
o What does minority mean by unambiguous? 2/3 judges said ambiguous
§ Caught between the two, am I going to get paid, are you vaguely authorized otherwise
o Moran: is this really a lumberyard, do you really sell anything or pay any credit?
§ Dubious about finances learned from in heath, so knowing what the letter means may turn on state of finances and telephone call
§ Going into bankruptcy, probably not just statement of finances
o Difficulty is that we need more evidence to know what’s going on
o What is necessary to show ambiguous? Statement of facts and recommendation, in what way to do a “personal guaranty,” may need something explicit
o P is only saying “I get to go to trial”
o So, if not ambiguous, judge is trying to say what unambiguous guaranty looks like, may be exact or resembling promissory note w/ explicit specifications
· DARLINGTON BRICK & CLAY PRODUCTS
o Like EMBRY as both are appeals of jury/bench trials, like HARDWARE b/c of ambiguous/agent & like Frigaliment b/c both had witnesses
o Testimony = Frigaliment were trade witnesses, here the witnesses are directly involved, no question regarding trade usage
o QUESTION OF INTERPRETATION
o Question is dealing w/ AA Homes, individually or as corporation
§ Comptroller=ignorance, never looked at job, will lose employment if testifies else, never explored, whoever typed up ledge card left off “INC.”
o Haggerty=background manager, only knows person he talks to
o What does the company know, what does AA think needs to be proven to escape personal liability
