CONTRACTS II OUTLINE
Interpretation: Term Defintion
Modern Approach: Modified Objective Approach
i. Corbin
1. Whose meaning controls the interpretation?
2. What was that party’s meaning?
ii. Crucial Issue is whether either party knew or had reason to know of the meaning attached to the K by the other.
iii. If neither knew or had reason to know then no mutual assent and thus no K
iv. If both parties had different meanings then no enforceable promise unless, (one is innocent and the other is not) or (contra proferentem: one has superior bargaining power and drafted the K)
Rules in aid of interpretation §§ 202 – 208
i. UCC § 2-202 Final Written Expression: Parol or extrinsic evidence
1. terms which are intended by the parties to be a final expression of their agreement cant be contradicted by evidence of any previous agreement or contemporaneous oral agreement but may be explained or supplement by evidence of consistent additional terms
ii. Course of Performance – UCC § 2-208 (1) and § 202 (4)
1. refers to the way the parties have conducted themselves in performing particular K at hand
a. 1 occasion not enough, but 2 may be enough to show a course of performance
b. A particular act may be a waiver of tha temr of the agreement
2. represents a pattern in the performance of the K. if a K involves repeated occasions for performance by either party, and the other party knows of the nature of the performance and has an opportunity to object to such performance, any course of performance accepted to without objection is relevant to the meaning of the agreement
iii. Course of Dealing – UCC § 1-205 (1) and § 223
1. pattern of performance b/t the 2 parties to the K, refers how they have acted w/respect to PAST Ks not w/respect to the K in question.
2. thus, if a particular term has been used in previous Ks and has been interpreted by them in a certain manner, this interpretation would be admissible to show how the term should be interpreted in the current K
3. represents a sequence of previous conduct b/t the parties to a particular transaction which establishes a common basis of understanding for interpreting their expressions and conduct
iv.
s the industry custom
iii. Contra proferentem: if a written K contains a word or phrase which is capable of 2 reasonable meanings, one which favors one party and the other of which favors the other, then that interpretation will be preferred which is less favorable to the one by whom the K was drafted
iv. Expression unius exclusio alterius: If one or more specific items are listed, without any more general or exclusive terms, then other terms though similar in kind are excluded
v. § 204: Supplying an Essential term – when the parties have not agrred to an essential term which is determinative of their rights and duties, a term which is reasonable in the circumstances is supplied by the court
§ 207: Interpretation Favoring the Public – when choosing maong the reasonable meanings of a promise or agreement or a term thereof, a meaning that serves that public interest is generally preferred
