K Interpretation

Prof. Merges

Contracts – 3.15.2011

Extrinsic evidence

• What is this? What does it mean?

Greenfield v Philles Records Inc.

• Procedural history

• Facts

The Ronettes

What is the cause of action?

What is the cause of action?

• Breach of K: Defendant has no right to license songs for movies (“synch rights”), and owes plaintiffs royalties on new releases of old songs

What language in the K is at issue?

“All recordings made hereunder and all records and reproductions made therefrom . . ., shall be entirely [Philles’] property . . . . Without limitation of the foregoing, [Philles] shall have the right to make phonograph records, tape recordings, or other reproductions of the performances embodied in such recordings by any method now or hereafter known . . . .”

Holding

Holding

• “Because there is no ambiguity in the terms of the Ronettes’ agreement, defendants are entitled to exercise complete ownership rights, subject to payment of applicable royalties due plaintiffs . . .”

• Extrinsic evidence; “personal notions of fairness and equity” – p. 389

WWW Assocs. v. Giancontieri

• Why is evidence inadmissible when an agreement is unambiguous on its face?

• How do you know when an agreement is unambiguous?

What was the deal in Giancontieri?

• $750,000 for 2 acre parcel

• Senior citizen home development

What was the deal in Giancontieri?

• $750,000 for 2 acre parcel

• Terms:“litigation cancellation” provision10 day cancellation provisionExtrinsic evidence: Only for plaintiff’s

benefit: defendant could not cancel

Trident Center v. Conn. Gen. Life

• History

• Facts

History

History

• Not only did Def. win, but plaintiff was sanctioned . . . .!

What language was at issue?

What language was at issue?

“[Trident] shall not have the right to prepay the principal amount hereof in whole or in part before January 1996.”

K signed 1983

Trial court

• Easy case

• No ambiguity here

9th Circuit

• Trident seeks to offer extrinsic evidence on the “true agreement of the parties” which allowed Trident to prepay the loan at any time

• This evidence cannot be barred under California law

Damning by following?

• What is Kozinski up to here?

• Or “the rule of law”/judicial restraint in action?

What was Trident’s 2nd argument?

“in the event of a prepayment resulting from a default hereunder or the Deed of Trust prior to January 10, 1996 the prepayment fee will be ten percent (10%).”

What about this?

“in the event of a prepayment resulting from a default hereunder on the Deed of Trust prior to January 10, 1996 the prepayment fee will be ten percent (10%).”