subset 2d: questions on interpretation · 2015. 10. 15. · 1 subset 2d: questions on...
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1
SUBSET 2D: QUESTIONS ON INTERPRETATION
QUESTION 67
Ms. Arnstein was the sole proprietor of a retail sporting goods store. Mr. Benitez owned a wholesale
business in the same industry.
For 1998-2002, Arnstein had stocked primarily soccer equipment in her store. During that period, Benitez
had supplied all of her needs. Arnstein chose Benitez because his prices were the lowest. They had had five separate
written contracts. Each writing purported to require Benitez to supply Arnstein with a specified quantity of
equipment. In each year Arnstein had ordered more, and Benitez had filled ail the orders without protest.
In early 2003 Arnstein began reading that the "hot" new sport would be field hockey. For that reason, when
Arnstein and Benitez negotiated their 2003 agreement, Arnstein insisted that the writing refer to field hockey sticks
as well as soccer gear. Like the prior writings, the agreement specified a quantity for both soccer and field hockey
equipment. The writing was drafted by Benitez' attorney. The 20-page, detailed writing contained the following
clauses, inter alia:
"RECITAL: Arnstein is desirous of filling all her sporting goods needs, notably soccer equipment, during
2003.
CLAUSE #4: Benitez hereby promises to supply Arnstein's needs for field hockey sticks up to a maximum
of 200.
CLAUSE #7: The parties understand that this writing supersedes and renders nugatory any prior oral or
written agreements between the parties."
Arnstein and Benitez met on January 9, 2003 to review the agreement. Benitez explained that he had
offered Arnstein "such competitive prices" because he had been able to purchase all Arnstein's needs from Chang
Company, a sporting goods manufacturer. Benitez stated that he viewed their new contract as "risk" because he had
never dealt in field hockey equipment before. Arnstein told Benitez "not to worry. Hockey is a relatively new sport
in El Dorado, and my research indicates that at max–and I mean absolute max–I'll be ordering only those 200 sticks
from you." Benitez said that "nevertheless" he wanted "it understood that the deal is dependent on my being able to
get at least 75% of your orders from Chang. This isn't 'for public consumption'; I don't want my competitors to know
that I depend so heavily on Chang, but that's the only way I can offer you such fantastic savings." Arnstein said,
"OK."
They met again on January 10 to sign the writing. Before they signed, Benitez reminded Arnstein of the
understanding about Chang Company. On a separate piece of paper, he had written "75.0. %." Arnstein initialed the
piece of paper and then signed the contract.
In mid-January 2003, DANCING WITH THE STARS began. The star of the show was a professional field
hockey player, Laura Dalton. The show emphasized her hockey background. The popularity of hockey soared; by
February 10 Arnstein's customers ordered 700 sticks.
On February 15, Arnstein placed the order with Benitez. On March 20, Benitez contacted Chang Company
to order the 700 sticks. Chang informed Benitez that he could fill "only 74.5% of the order. Thanks to Dalton,
hockey orders have gone through the roof. If you'd called first thing in March, I might have been able to do it, but
now 74.5% is the best I can do."
Benitez tells Arnstein he cannot fill her order. ARNSTEIN SUES BENITEZ FOR DAMAGES FOR
MATERIAL BREACH OF CONTRACT. At trial, there is undisputed expert testimony that in contracts in this line
of business, (1) "it is not uncommon" to treat "maxima" or specifications of quantities as mere estimates; and (2)
numbers are "usually rounded" --75% would include anything in excess of 74.5%. WHO WILL PROBABLY
PREVAIL?
2
QUESTION 67
1 CONDITIONS
2 D wants to add a 75.0% condition
11 Theory #1: implied term
12 based on actual intent
13 no
14 knew it wasn't in writing
15 based on interpretative intent
16 unforeseen development
17 popularity of the sport
18 untoward, one-sided result
19 no
21 Theory #2: introduce the parol evidence
22 Question #1: integration
23 test finality
24 writing
25 detailed
26 20 pages
31 Question #2: complete integration
33 UCC
34 personal property
35 "would certainly"
41 prior oral understanding
42 +merger clause
43 "prior"
44 +detailed
45 +20 pages
46 -but not for public consumption
47 -not let competitors know
48 UCC bias in favor of partial
51 writing signed at the execution of the K
52 merger clause inapplicable
53 even stronger case for partial integration
61 Question #3: "exceptions"
62 consistent oral condition precedent to effectiveness of writing as K
63 "the deal is dependent on …."
64 only conditions to K formation
65 not operative during performance
66 here fairly early
71 if the condition is part of the contract, interpret
72 assume "75.0%"
81 Step #1: identify all the possible meanings
82 UCC
83 text–75.0
84 trade usage – "usually" rounded
3
85 no course of dealing
86 no course of performance
87 at this point, court might say plain meaning – the decimal point
88 if not, two possible meanings, infra
91 Step #2: characterize each meaning as a type of usage
92 general: exactly 75.0
93 decimal point
94 limited: in excess of 74.5
95 existence
96 "usually"
97 impute
98 evidently an experienced industry member
99 mutual?
99.1 individual
101 Step #3: select a meaning
102 primary basis: order of preference
103 Williston
104 limited unless judge finds 75.0 to be plain meaning
105 Corbin
106 limited
111 secondary basis: maxims
112 contra proferentem
113 Benitez' attorney
114 now a last resort
121 if 75.0 a condition, what happened?
122 not fulfilled
123 74.5
124 excuse
125 prevention
126 delay
127 "If you'd called first thing in March"
128 wrongful
129 if excused, duty of immediate performance arises
131 scope of duty: supply all the needs?
132 interpretation
141 Step #1: identify all the meanings
142 UCC
143 text:
144 "maximum"
145 context
146 recital
147 "needs"
148 but "notably soccer"
149 trade usage
149.1 "not uncommon"
149.2 a bit weak
149.3 course of dealing
4
149.4 five prior contracts
149.5 always ordered more
149.6 no objection
149.7 result: two meanings-true maximum or mere estimate
151 Step #2: characterize each meaning as a type of usage
152 general
153 true maximum
154 limited
155 estimate
156 existence?
157 "not uncommon"
158 impute?
159 both longterm members of industry
159.1 mutual
159.2 course of dealing
161 Step #3: choose
162 primary basis: order of preference
163 Williston
164 limited
165 Corbin
166 mutual
171 secondary basis
172 contra proferentem
173 Benitez' attorney
174 practical construction
175 later conduct
176 Benitez not object
181 if duty not performed
182 no discharge
183 unforeseeable event
184 popularity of field hockey
185 but not render performance impossible
186 breach
187 material breach?
188 important part of contract
189 in limine
189.1 early in the performance phase
5
QUESTION 68
Ms. Ambrose was the sole proprietor of a company that manufactured glass. Mr. Ballastra was the sole
proprietor of an artists' supply company. He purchased the company in December 2000. He had formerly been a
stock broker. The prior owner had dealt with Ms. Ambrose.
On January 10, 2001, Ambrose and Ballastra entered into a written contract drafted by Ballastra's attorney.
The writing contained the following clauses, inter alia:
–A clause reading "WHEREAS Ballastra seeks to secure a supply for all his customers' glass needs during
the next ten years and Ambrose is willing to expand her production capacity to meet those needs."
–#3. "Ambrose shall deliver, and Ballastra shall order, accept, and pay for, a minimum of 1,000 pounds of
glass during each month of this agreement."
–#5. "To satisfy this agreement, the glass delivered must strictly have the following composition: ... a
minimum of at least 15.0% lime …."
–#11. "Ballastra shall pay $4.00 a pound for clear glass and $6.00 a pound for colored glass."
–#12. "This writing supersedes all prior agreements between the parties and embodies their entire
agreement."
Just before they signed the writing, Ambrose told Ballastra that "since you're a newcomer to this industry,
you ought to realize that in this business, quantities and percentages in contracts are usually ballpark estimates. Is
that agreeable?" Ballastra nodded and then signed.
On February 1, Ballastra placed his initial order under the contract. On February 3, Ambrose filled the
order. Ballastra paid for the shipment and immediately made the glass available to his customers. Mr. Candide was
one of the first customers to purchase and use the glass. When he placed the glass in his kiln, the heat produced
excessive bubbles in the glass and ruined the art work. Candide complained to Ballastra.
On February 15, Ballastra took several samples of the Ambrose glass to a nearby analytical laboratory. The
laboratory reported that the samples contained only 14.9% lime and explained that deficient lime content can cause
glass to bubble when heated.
On February 20, Ballastra called Ambrose and informed her of the laboratory's findings. She stated that she
had always used" the same formula for all her customers and that "everyone else finds it perfectly satisfactory for art
work. Your predecessor did. So what if it's only 14.9% lime? I told you before we signed that in this business, things
like percentages are only approximations. I've lived up to my part of the bargain." Ballastra told Ambrose that he
had "some thinking to do about the deal."
On March 1, Ballastra received a visit from Ms. Dondero, a sales representative of Elite Plastics. She told
Ballastra that in February, her company had "just released a revolutionary new type of plastic which is a perfect
substitute for glass in art work. We even call it Plastic Glass." She told Ballastra that Elite charged $2.00 a pound for
clear art plastic and $3.00 a pound for colored art plastic.
On March 2, Ballastra phoned Ambrose. He informed her that after "thinking it over," he had decided that
he no longer needed any glass from her company.
Ambrose sues Ballastra for damages for material breach of contract. At trial, there is undisputed expert
testimony that: (1) in the national glass trade, it is the virtually universal understanding that quantities are estimates;
and (2) a slight majority of the members of the industry treat percentage figures such as "15%" as mere estimates.
CAN AMBROSE RECOVER? Do not discuss the measure of damages.
6
QUESTION 68
1 PAROL EVIDENCE RULE
2 Oral understanding
3 A said it
4 B nodded
5 question 1: integration?
6 Test finality
7 yes
11 question 2: complete integration?
12 PP transaction
13 UCC governs
14 test "certainly"
15 -merger clause
16 +no reference to contemporaneous
17 -refers to "prior"
18 -strained argument: before the writing
19 -"embodies"
19.1 difficult to satisfy the "certainly test"
19.2 partial integration
21 if partial, supplement
22 consistent additional term
23 if so, no breach
31 IMPLICATION
32 Implied promise to maintain requirements
33 implied-in-fact based on actual intent
34 PER analysis, supra
35 if excludable, not use as basis for implication
36 probably not
41 implied-in-fact based on interpretative intent
42 original status
43 "needs"
44 requirements contract
45 split of authority over implied promise
46 fairness, reliance
47 expand capacity
48 but can sell to third parties
51 later development
52 advent of Plastic Glass
53 unforeseeable?
54 "revolutionary"
55 effect on structure of bargain
56 drastic impact
57 here?
58 lopsided outcome?
61 INTERPRETATION OF QUANTITIES
62 Step #1: identify all the meanings
63 text
64 "minimum"
65 context
7
66 not "strictly"
67 not "at least"
68 trade usage
69 expert testimony
69.1 course of dealing
69.2 with prior owner
69.3 not this owner
69.4 conversation
69.5 probative of mutual usage
69.6 but not routinely under UCC
69. 7 result at this step: two possible meanings
71 Step #2: characterize each meaning as a type of usage
72 general usage
73 minimum
74 trade usage
75 estimate
76 (1) existence
77 "virtually universal"
78 (2) impute to party
79 P is the one resisting
79.1 evidently longterm member of industry
79.2 conversation discloses actual knowledge
79.3 mutual usage
79.4 estimate
79.5 only if court admits the conversation
81 Step #3: choice
82 primary basis: order of preference among usages
83 Williston
84 trade usage
85 Corbin
86 same result
87 secondary basis: the canons or maxims
88 contra proferentem
89 drafted by D's attorney
89.1 maxim used only as a last resort
91 INTERPRETATION OF PERCENTAGE
92 Step #1: identify all the meanings
93 text
94 "15.0"
95 not just "15"
96 context
97 "strictly"
98 "at least"
99 especially strong
101 trade usage
102 expert testimony
103 mutual usage
104 course of dealing
105 prior owner
106 not this owner
107 conversation
8
108 probative of mutual usage
109 but not routinely admissible under UCC
109.1 admit only if no plain after considering other sources
109.2 result: two meanings
111 Step #2: characterize each meaning as a type of usage
112 popular usage
113 exactly 15%
114 trade usage
115 estimate
116 but relevant?
117 the trade usage relates to figures such as 15, not 15.0
118 (1) existence
119 only slight majority
119.1 (2) impute to D?
119.2 new owner
119.3 only one month
119.4 new to industry
119.5 but actual notice-conversation
119.6 mutual usage
119.7 only if court admits conversation
121 Step #3: choice
122 primary basis: order of preference among usages
123 Williston
124 strict standard for proving trade usage
125 perhaps select popular
126 Corbin
125 laxer standard for trade usage
126 perhaps trade usage
129 secondary basis: canons or maxims
129.1 contra proferentem
131 P'S CONDITION
132 interpretation of percentage
133 if failed, no duty of immediate performance
134 D'SDUTY
135 interpretation of quantity
136 breach?
137 if breach, material?
138 essential part of the bargain
9
QUESTION 69
In 1997, the "Peruvian" style began taking El Dorado by storm. Leather clothing and furniture with
geometric designs from Peru became the rage in El Dorado. Mr. Asdrubale had inherited a large sum of money; and,
having heard of the popularity of the Peruvian style, he decided to make an investment to capitalize on the rage. Ms.
Bosch, a Peruvian native, had immigrated to the United States. She was the sole proprietor of Bosch Imports, which
sold goods primarily from Central and South America. Bosch Imports was headquartered in New York City.
In January 1998 the Morena Chamber of Commerce held a Peruvian style trade show to enable local
businesspersons to meet representatives of Peruvian companies and importers such as Ms. Bosch. On January 10,
Asdrubale and Bosch met at the show. She had on display several items of clothing and furniture, all imported from
Peru. Bosch explained to Asdrubale the geometric style features which had made Peruvian wares so attractive.
On January 15, as the trade show closed, Asdrubale and Bosch entered into two written contracts, which
were stapled together. Under the terms of the contracts, for a one year period Bosch promised to supply all of
Asdrubale's requirements for "Peruvian style" merchandise. Both contracts named "John Asdrubale" and "Michelle
Bosch, proprietor of Bosch Imports," as parties. In addition, both contracts described "the Peruvian style" in roughly
the same manner as Bosch had orally described it to Asdrubale. Furthermore, the contracts specified the dimensions
of the furniture and clothing. Finally, both contracts included clauses providing that the writing "supersedes any
prior or contemporaneous oral understanding between the parties."
One contract dealt with "Peruvian style" clothing, the other with "Peruvian style" furniture. The first
contract required Bosch to provide a Peruvian certificate of origin for every shipment under the contract. The second
contract was silent on the subject. However, just before he signed, Asdrubale referred to "certificates for the
furniture and clothes." Bosch nodded and said only, "Sure."
For the first three months of the contract, Bosch supplied only clothing and furniture manufactured in Peru.
However, the Peruvian style became so popular nationwide that several American companies began manufacturing
furniture in the same style. Bosch discovered that she could save money by providing Asdrubale with Peruvian style
furniture originating in the Carolinas. At first, Asdrubale did not notice the difference; for two months he accepted
the furniture, paid for it, and once complimented Bosch that "the latest shipments have been even better than the
early shipments." However, in the sixth month a customer called Asdrubale's attention to the fact that all the
furniture items in his store had tags indicating North Carolina manufacture. The customer not only complained to
Asdrubale; she also wrote to the local paper. The paper ran a story with the headline, "Asdrubale Selling Peruvian
Furniture-From North Carolina!" Asdrubale's sales plummeted. He then attempted to revoke his acceptance. He
refused to pay for the furniture already delivered and to take any additional shipments from Carolina.
BOSCH SUES ASDRUBALE FOR DAMAGES FOR BREACH OF CONTRACT For purposes of trial,
the parties stipulate that: The rejected furniture met the description of the geometric Peruvian style and all dimension
specifications set out in the contracts; when Asdrubale and Bosch signed their contract, almost 100% of the
"Peruvian style" goods for sale in El Dorado, including those on display at the trade show, were of Peruvian origin;
but even at that time nationwide 60% of the goods advertised in that manner did not originate in Peru. IF THERE IS
A BREACH, IS IT MATERIAL?
10
QUESTION 69
1 DUTY TO PAY
11 CONDITIONS
12 #1: deliver furniture
13 express?
14 no quotation
15 constructive
16 part of the bargain
21 what happened to condition #1
22 fulfilled
23 met the specifications
24 stipulation
31 #2: originate in Peru
32 not an express provision of the second contract
33 nevertheless a term?
41 THEORY #1: INCORPORATION BY REFERENCE
42 an express provision in the first contract
43 executed at same time
44 stapled together
45 requirement #1: reference
46 no reference to the other writing
47 requirement #2: intent to incorporate
48 no facts indicating such an intent
49 ergo, D win under this theory
51 THEORY #2: SUPPLEMENT WITH CONSISTENT ADDITIONAL TERM
52 parol evidence rule
53 P referred to "certificates for the furniture and the clothes"
54 D said, "Sure"
55 express agreement
61 threshold question: an integration at all?
62 final embodiment of any part of the contract
63 probably yes
71 next question: complete or partial integration?
72 split of authority at common law
73 but this a personal property contract
74 ergo. UCC govern
75 2-202
76 text ambiguous
77 but Comment announce test
78 whether reasonable parties would certainly
79 somewhat like Williston test
79.1 objective standard
79.2 but "certainly" rather than "normally"
79.3 bias against finding complete integration
81 apply to the facts
82 merger clause
83 cut in favor of complete
84 Williston find complete
11
85 but again "certainly" rather than "normally"
86 ergo, probably partial integration
87 P probably prevail on this theory
91 THEORY #3: INTERPRETATION
92 "Peruvian style"
101 Step #1: identify all the possible meanings
102 if only text and context: geometric design
103 text uses the expression "Peruvian style"
104 context–dimension specifications
111 not limited to the four corners
112 again, UCC control
113 2-202
114 (1) trade usage
115 all the furniture at the show
116 all the furniture advertised for sale in the state
117 (2) mutual usage–course of dealing
118 no prior dealings between P and D
119 (3) mutual usage–course of performance
119.1 earlier accepted furniture manufactured in Carolinas
119.2 but unaware originated in Carolinas
121 mutual usage–statements at time of execution of contract
122 not under the Code
123 only if trial judge finds ambiguous
124 if judge finds ambiguous can consult the extrinsic evidence
125 "Peruvian"
126 arguably ambiguous
127 geographic connotation
131 Step #2: characterize each potential meaning as a type of usage
132 popular
133 perhaps geographic connotation
134 limited
135 –geographic
136 all the goods at the show
137 all the goods in the state
138 but not nationally
141 –trade
142 (1) existence
143 not nationally
144 in the state
145 (2) impute
146 P just joined the trade
147 more difficult to impute national usage to him
151 –mutual
152 P made statement
153 put D on notice
155 D said, "Sure"
155 –individual usages
156 P
157 D
161 Step #3: choose
162 primary basis of choice: order of preference among the usages
12
163 Williston
164 perhaps find only a popular meaning
165 high standard for trade usage
166 mutual only if reflected on face of writing
167 Corbin
168 mutual
171 secondary basis of choice: maxims
172 part of the same transaction
173 executed at the same time as clothing contract
174 favors P
175 practical construction
176 subsequent conduct
177 but P did not realize from Carolinas
178 maxim inapplicable
179 express unius est exclusio alterius
179.1 in one contract but not the other
179.2 favors D
181 if needn't be of Peruvian origin, fulfilled condition
182 if need be of Peruvian origin, excuse?
183 substantial performance
184 –subjective element
185 intentional
186 to cut cost
187 –objective element
188 complimented
189 "even better"
189.1 but customer reaction
189.2 in any event, only constructive conditions
189.3 an express condition?
191 D under duty of immediate performance
192 no discharge
193 no performance
194 ergo, breach
201 if breach, material?
202 not in limine
203 perhaps even in good faith
204 however, the quid pro quo for P
205 money for the furniture
206 probably material
13
QUESTION 70
Ms. Albion was the sole proprietor of a company that manufactures salad dressings and sells the dressings
to wholesalers. Mr. Berton owns a company that purchases food products manufactured by others and sells the
products wholesale.
Both Albion and Berton are members of the Salad Dressing Producers and Wholesalers Association
(SDPWA), including 67% of the American producers and wholesalers. Berton joined in 1995, but Albion has been a
member only since December 1998. The SDPWA promulgates industry standards. Standard 3.2 provides that when
a contract specifies a percentage content, "unless a contrary intent is manifested, the actual value shall be rounded
off to the closer whole digit. Thus, 19.51 would be rounded up to 20, and 20.49 would be rounded down to 20."
Albion and Berton had dealt with each other between 1996 and 1998. During that period, they had three
contracts for ranch salad dressing. The contracts specified that the dressing Albion delivered had to have "at least
15% sodium content," as certified by Castro Testing Laboratory. On several occasions under each contract, the
delivery has 14.9% sodium content, Castro Laboratory certified that content, and Berton made no objection about
the shipment.
In early January 1999, Berton obtained a large contract to provide Balsamic vinaigrette salad dressing to
Healthy Choice Meals. In turn, he wanted to purchase the dressing from Albion. On January 3, he phoned Albion,
described his contract with Healthy Choice Meals, and added that "I guess we can have the same basic deal we've
cut in the past."
On January 10, Albion visited Berton's headquarters to sign a detailed, lengthy contract drafted by Berton's
attorney. The contract began with a number of recitals, including a statement that both parties are members of
SDPWA. The recital noted that SDPWA "has promulgated several standards relevant to agreements between its
members." Another recital noted that Berton was entering the instant contract to assure a supply for his contract with
Healthy Choice Meals. (That contract made it clear that dressing with even 12.01% sodium was unacceptable.) The
same recital pointed out that Healthy Choice Meals "is committed to supplying its customers with products without
excessive amounts of ingredients such as sodium and fat." Clause 2 of the writing stated that for a three year period,
Albion agreed to supply Berton's requirements for Balsamic vinaigrette dressing. Clause 3 added that the dressing
Albion delivered could have "no more than 12.0% sodium, as strictly certified by Castro Testing Laboratory."
Clause 4 referred to two other ingredients of the recipe and described those contents respectively as "3%" and "2%."
Finally, the writing included a clause stating that the writing "represents the parties' entire agreement and supersedes
any prior or contemporaneous oral or written promises or agreements."
Albion did not bother to read the writing. However, before signing, she asked: "Again, this is basically our
old deal but for Balsamic vinaigrette. Right?" Berton nodded.
On February 1, Albion made the first delivery to Berton under the contract. When Castro Laboratory
analyzed the delivery, it found that the sodium content was 12.3%. Berton phoned Healthy Choice Meals and was
told that that high a level of sodium was unacceptable. Berton then phoned Albion. He told her that he would keep
the shipment "because I can probably sell it to someone other than Healthy Choice. However, read your contract.
12% means no more than 12.0%, not 12.3%. Period. End of sentence." Albion remained silent.
On February 10, Albion made the second delivery. When Castro certified that the sodium content was
12.2%, Berton rejected the shipment. Albion sues Berton on the contract for damages for breach. CAN SHE
RECOVER? DO NOT DISCUSS THE MEASURE OF DAMAGES.
14
QUESTION 70
1 INCORPORATION
2 STANDARD 3.2
3 existence?
4 yes
5 intent to incorporate?
6 reference that SDPWA members
7 reference to standards
8 "relevant"
9 but ambiguous
9.1 even if, "unless a contrary intent"
11 HEALTHY CHOICE CONTRACT
12 existence?
13 yes
14 intent to incorporate?
15 –D hadn't seen
16 +reference
17 +whole purpose to assure supply for that K.
18 common sense
21 IMPLICATION
22 types
23 interpretative intent
24 no unforeseen development
25 actual intent
26 both industry members
27 67%
28 again even if, "unless a contrary intent"
31 PAROL EVIDENCE RULE
32 early January: "same basic"
33 January 10: "Again basically our old"
34 three years
35 three contracts
36 several occasions under each K
37 14.9%–15%
41 integration?
42 test–finality for even part
43 yes
51 complete integration?
52 UCC governs
53 test "certainly"
54 +lengthy
55 +detailed
56 +merger clause
57 but "certainly" tough standard
58 ergo, partial
59 even if partial, only supplement
59.1 "contradict"?
61 INTERPRETATION
62 STEP 1: IDENTIFY ALL POSSIBLE MEANINGS
63 text
64 "12.0"
65 context
66 "strictly"
15
67 "2"
68 "3"
69 reference to the HC contract
71 limited usage
72 automatically consider under UCC
73 existence?
74 67%
75 impute?
75 one only member since Dec. 1998
77 but Berton since 1995
78 Berton disputing
81 mutual usage
82 certain types automatically admissible under UCC
83 course of dealing
84 three contracts
85 three years
86 several times
87 course of performance
88 +shipment #1
89 +accepted
89.1 -but protest
91 conversations
92 not the right type under UCC
93 thus, only if ambiguous
94 ambiguous here?
101 outcome here: two meanings
102 narrow: exactly 12.0
103 broad: round up or down
111 STEP 2: CHARACTERIZE EACH MEANING AS USAGE TYPE
112 general?
113 exactly 12.0
114 limited?
115 broad meaning
116 mutual?
117 broad
121 STEP 3: CHOOSE A MEANING
122 PRIMARY BASIS: ORDER OF PREFERENCE
123 UCC silent
124 Corbin
125 mutual
126 broad
127 Williston
128 limited
129 broad
129.1 grudgingly
131 SECONDARY BASIS: MAXIMS
132 "practical construction"
133 subsequent conduct
134 +shipment #1
135 +accepted
136 -but protest
137 contra proferentem
138 Berton's attorney
16
141 assume the narrow meaning
142 failure of condition
143 no evident excuse
144 no duty of immediate performance
151 assume the broad meaning
152 shipment #1 and #2
153 fulfilled
154 later shipments
155 failed
156 but prospective non-performance
157 D refused to accept
158 duty of immediate performance
159 no evident discharge
159.1 ergo, breach
17
QUESTION 71
Ms. Asdrubale had resided in Wyoming before moving to El Dorado While she lived in Wyoming, she ran
a very large retail equestrian ("tack") store for ten years. She catered primarily to wealthy clientele. Mr. Bayamo had
been her supplier for saddle soap Bayamo always filled Asdrubale's orders by shipping her the most expensive
brands of saddle soap (suitable for the most expensive Argentine and British saddles with the finest leather). On
most occasions, he shipped her either Ye Olde Saddle Soap or Old Fashioned Saddle Soap. They were the two best
known brands of saddle soap. Bayamo had to pay $5.00 wholesale for each bottle of the soap which he, in turn, sold
to Asdrubale.
In late 1995, Asdrubale decided to move to El Dorado. Before doing so, she obtained a market survey of El
Dorado. The survey stated that if she opened the same size business in Morena and again catered to wealthy
clientele, she could expect the same level of sales and profits, including sales and profits for saddle soap. Based on
the report, Asdrubale moved to El Dorado in early January 1996. She called her new store "The Traditional
Saddlery."
Before opening the new store, on January 15, 1996 Asdrubale entered into a written contract with Bayamo.
The writing, prepared by Bayamo's attorney, contained several recitals of fact. The first referred to "Michelle
Asdrubale, doing business as THE TRADITIONAL SADDLERY." Recital #2 stated that both parties were members
of the American Tack Store Association (ATSA). Recital #3 added that the two had had "a long, mutually profitable
relationship'' and desired "to continue the same basic relationship" in the future. Recital #5 read that Bayamo
understood mat Asdrubale was opening a new business "to sell, inter alia, the high grade Argentine and British
saddles which she had vended in the past in Wyoming." The text of paragraph three stated that Bayamo would fill
Asdrubale's requirements for "tested, high quality saddle soap, such as Ye Olde Saddle Soap and Old Fashioned
Saddle Soap." Paragraph six stated that the soap had to be suitable "for high grade saddles." Paragraph ten provided
that the writing "represents the parties" entire agreement and supersedes any prior written or oral understandings
between the parties."
When Asdrubale and Bayamo met to sign the writing, they had an oral conversation. He stated that her
''timing was great because there are a lot of new products coming on the market. In particular, there have been some
startling advances in saddle soap chemistry." He assured her that she would "like the new stuff." Asdrubale
responded, "I might, but just remember my new name, 'The Traditional Saddlery.' I chose that name for a reason. In
this line of business, there's a lot to a name. I like the tested, tried, and true." They then signed the writing.
In late January, Bayamo learned about a new saddle soap, New Age Soap. It had essentially the same
chemical composition as Ole Fashioned Saddle Soap; but because it was produced by a different manufacturing
process, it cost Bayamo only $2.00 per bottle. After testing, ATSA had given it the same quality rating as Ye Olde
Saddle Soap and Old Fashioned Saddle Soap. However, New Age soap had virtually no name recognition outside
Virginia.
On February 1, Asdrubale placed a large order for saddle soap. On February 10, Bayamo shipped
Asdrubale five crates of bottles of New Age soap. Asdrubale unloaded the crates without noticing the labels. On
February 15th, a customer complained to Asdrubale that she, Asdrubale, did not carry any "really traditional" soaps.
The customer told Asdrubale that "it would be nuts to risk an expensive saddle with some new fangled product."
Asdrubale phoned Bayamo and demanded that he replace the shipment with Ye Olde or Old Fashioned
soap. He refused to do so. Asdrubale sues Bayamo for breach of contract.
18
QUESTION 71
1 the existence of a duty to provide traditional soap
11 argument #1: oral promise
13 P "tried and true"
12 D not object
14 before signature of writing
21 question #1: integration
22 test finality
23 detailed
24 obviously some provisions final
31 question #2: complete integration
32 general test completeness
33 specifically UCC test govern
34 saddle soap personalty
35 UCC in effect in El Dorado
36 the UCC test
37 text ambiguous
38 but Comment "certainly"
39 like Williston objective
39.1 but difficult to find complete
41 application of the UCC test
42 merger clause
43 but no reference to "contemporaneous"
44 same subject-matter
45 but "certainly"
46 probably a partial integration
47 ergo supplement the writing
51 argument #2: implied promise
52 reference to prior relationship
53 continue the same basic relationship
54 prior practice
55 "always" most expensive brands
56 but "most occasions" Ye Olde or Old Fashioned
61 argument #3: express promise
62 the text "tested"
71 step #1: identify all the possible meanings
72 intrinsic aids: context
73 reference to ATSA
74 name "TRADITIONAL"
75 "continue the same basic relationship"
76 "most occasions"
81 extrinsic aids
82 UCC govern
83 automatically consider "usage of trade"
84 ATSA
85 "course of dealing"
86 prior dealing
87 "course of performance"
88 none here
89 but not the oral conversation
19
89.1 different type of evidence of mutual
91 moreover, even Williston permit if ambiguous
92 "tested"
93 probably ambiguous
94 therefore, consider conversation as well
101 step #2: characterize each usage
102 general
103 probably D's meaning
104 in fact tested
105 limited usage
106 ATSA
107 (1) usage exists
108 (2) impute–both members
109 mentioned in writing
111 mutual usage
112 P's meaning
113 P said it
114 before signing
115 D did not object
116 individual usage
117 P had in mind
118 D on notice
121 step #3: primary basis of choice-order of preference among usages
122 UCC not prescribe
123 Williston
124 mutual only if reflected on face of writing
125 here equivocal
126 probably choose business usage
127 Corbin
128 prefer mutual
129 the meaning P urges
131 step #4: second basis of choice-the canons or maxims
132 contra proferentem
133 Bayamo's attorney
134 but modernly a last resort
135 if rely on, resolve against D
136 ejusdem generis
137 "such as"
138 same chemical composition
139 same quality rating
139.1 but new
139.2 little recognition outside Virginia
141 duty of immediate performance?
142 conditions
143 implied condition: place order
144 fulfilled re first installment
145 placed order
146 future installments
147 no orders
148 but prospective non-performance of conditioned duty
151 if breach, material?
152 perhaps innocent misunderstanding
20
153 +in -1 fmine.
154 early in the contract
155 some jurisdictions automatically material
156 term here?
157 +important in an economic sense
158 cater to wealthy clientele
159 market survey
159.1 customer's remark
159.2 little name recognition outside Virginia
21
QUESTION 72
For 10 years, Mr. Ariola owned a company that published materials for continuing education organizations.
He had worked almost exclusively with small continuing legal education (CLE) organizations. For the past five
years, he had hired Mr. Bertilion's printing plant to actually produce the materials. The largest order had been for
only 100 copies. Both businesses were located in the City of Morena.
Ariola and Bertilion had developed a standard form for their contracts for CLE materials. The writing
contained a clause stating that the writing "supersedes all prior understandings between the parties." Another clause
had a blank for "Quantity" just before "number of sets of materials." Ariola and Bertilion filled in the blank on each
contract. Still another provision, the delivery schedule clause, included the word "estimated;" but that word did not
appear in the quantity clause. During the performance of slightly less than a majority of their CLE contracts, Ariola
had ultimately ordered fewer sets of materials than originally specified in the writing; and Bertilion had neither sued
Ariola for breach of any of those contracts nor even mentioned the possibility of a suit.
In early 1993, Ariola decided to begin publishing materials for continuing medical education (CME)
organizations. On January 101 1993, he discussed a contract with Bertilion to publish materials for the March 1st
meeting of the El Dorado A.M.A. chapter. They used their standard form, lined out "legal," and wrote in "medical."
Just before inserting the quantity figure, Ariola said that he was "a bit worried, since I don't have any CME
experience. I hate to pin myself down." Bertilion responded, "I guess life is just full of risks. I need a hard number.
Stick your neck out." At that point, Ariola wrote in "1,000." The agreement constituted a valid and enforceable
contract.
On February 1, 1993, Ariola spoke with Dr. Carroll, the A.M.A. chapter president. She informed Ariola
that early registration was "way down" and that she would probably need only 500 copies of the materials. Later that
day Ariola phoned Bertilion to order 500 copies. Bertilion reminded him that the writing called for 1,000 copies.
Ariola responded that he was " fully aware of what the contract calls for, but hopefully registration will pick up
before the deadline."
On February 15, Carroll told Ariola that the "final" registration figure was 520 attendees. Ariola
immediately phoned Bertilion and attempted to place a "final order" for 520 sets. Ariola said that he expected
Bertilion to be "as flexible" as Bertilion had been "in the past." Bertilion stated that "this was the big time now, and
a promise is a promise." Ariola said, "The deal is off."
BERTILION SUES ARIOLA. DOES BERTILION HAVE A CAUSE OF ACTION FOR BREACH? IF
SO, IS THE BREACH MAJOR OR MINOR?
The case comes to trial today. At trial, Ariola offers testimony by the president of the El Dorado Publishers
Association. She testifies that "for the past few years, it's been a custom in our industry to regard quantity figures as
ballpark numbers. The really experienced people in the industry know that the final number is sort of a moving
target."
22
QUESTION 72
1 extrinsic evidence of oral conversation
2 "pin"
3 "hard"
4 "risks"
5 "stick"
6 supplement
11 parol evidence rule
12 question #1: integration?
13 final embodiment of part?
14 writing
15 clause
16 yes
21 question #2: complete integration?
22 Wigmore
23 subject matter
24 quantity
25 therefore complete
26 Williston
27 hypothetical, reasonable parties
28 seemingly complete
29 clause
29.1 but only "prior"
29.2 here contemporaneous
29.3 still probably complete
31 Corbin
32 subjective intent
33 perhaps partial
34 UCC
35 objective standard like Williston
36 but Comment: "certainly"
37 govern here?
38 deliver merchandise
39 but printing service
41 even if complete, may admit extrinsic to interpret
42 step #1: identify all the possible meanings
54 ------objective approach
44 text
45 a number
46 seemingly a plain meaning
47 context
48 "estimated"
49 no comparable language in this term 59.1
49.1 therefore, 1,000
51 ------modified objective approach
52 generally follow objective approach
53 exception: admit trade usage as matter of course
54 president
55 "our"
56 state
57 but here city
58 "industry"
59 all publishing
59.1 but here CLE
59.2 perhaps a mere estimate
23
61 -----UCC
62 follow objective approach with exceptions
63 an exception for trade usage
64 supra
65 an exception for course of dealing
66 earlier contracts
67 but different size
68 but CLE
69 an exception for course of performance
69.1 here?
69.2 a mere estimate?
71 -----subjective
72 any relevant evidence
73 a mere estimate
81 step #2: classify each meaning as a type of usage
82 general
83 1,000
84 trade
85 supra
86 mutual
87 prior contracts
88 but some differences
89 conversation
89.1 "pin"
89.2 "risks"
89.3 "hard"
89.4 "stick"
89.5 individual
91 step #3: primary basis of choice
92 order of preference among types of usage
93 Williston
94 what result?
95 Corbin
96 what result?
97 secondary basis
98 canons or maxims of interpretation
99 any result on these facts?
101 duty to pay
102 condition
103 deliver
104 failed
105 prospective non-performance of the conditioned duty
106 "off
111 duty of immediate performance
112 not performed
113 no evident discharge doctrine
114 still possible to perform
115 financial impracticability?
116 not extreme enough
117 therefore breach
121 major or minor breach?
122 extent P already received performance?
123 nothing
124 probability P will receive performance?
125 "off"
126 character of the breach?
24
127 intentional
128 forfeiture by D
129 none: not incurred expense yet
129.1 therefore material
25
QUESTION 73
For 20 years, Ms. Elise Abbott had owned the Abbott Horse Ranch in a suburb just outside Morena. She
resided in the Midwest until mid–1990, and she employed her cousin, Frank Abbott, as the manager. Frank had
always purchased the ranch's supplies from Belindez Feed and Grain, owned by Jorge Belindez.
When Frank retired, Elise moved to El Dorado to take over the ranch in early December 1990. Before
leaving town in late December, Frank reminded Elise to buy the next six months' supply of feed from Belindez in
January 1991.
On January 2, 1991, Elise visited Belindez' office. During an oral conversation, Abbott told Belindez that
Frank had told her "almost everything she needed to know" about running the ranch. She said that she stopped by to
"buy all" the feed she would "need during the first half of the year." Belindez assured her that he would fill her
"requirements." He stated that he "promised" her that he would "recognize and observe" all the practices "normal for
the business." Belindez added that based on past experience, he would "estimate" Ms. Abbott's horses would
"probably" consume 80 tons before the end of June.
On January 3, Abbott and Belindez entered into a valid, enforceable written contract. A recital in the
writing referred to their prior dealings and stated that the parties were entering into "another agreement to meet the
Abbott Horse Ranch's feed needs." The writing stated a quantity of "80.0 tons" and specified a price of "$100.00 per
ton." The writing stated that Abbott could order up to five tons at a time and that Belindez would deliver the order
within "approximately" 48 hours. Abbott was to pay within "roughly" 72 hours. The writing stated that it
"superseded all prior oral agreements between the parties."
When Abbott and Belindez signed the writing, there was a widespread custom in the ranching business in
the Morena area; the custom was that quantities specified in feed supply contracts were treated as estimates and that
the quantity was the actual amount needed. Almost all the local ranchers knew the custom. Frank was familiar with
the custom, but Elise was unaware of it.
By May 30, the Abbott Ranch had used and paid for 80 tons of feed. By that date, the price of feed had
fallen to $70 per ton. On June 1, when Belindez happened to drive by the ranch, he noticed that the stack of feed was
gone. He went to his office, had three trucks loaded with a total of 10 tons of feed, and called Abbott. He informed
her that he would deliver the feed at the "agreed upon price." She refused to pay for any more feed at that price; she
said that she considered herself free to buy any feed in excess of 80 tons on the open market at the best price.
Belindez angrily told her that he didn't appreciate "being stabbed in the back" after having worked so closely with
Abbott Ranch for years.
Later the same day, Belindez heard that a fire at Chang Stables had destroyed its feed. He phoned Dennis
Chang, the stable owner. Belindez told Chang that he had three trucks already loaded with feed, ready to deliver.
Given the emergency and the high quality of Belindez' feed, Chang paid Belindez $100 per ton. The three truckloads
would have met Abbott Ranch's needs during June. Since Chang's stable was farther away than Abbott's, Belindez
incurred an additional $300 in hotel and meal expenses for the truckers who made the delivery.
BELINDEZ SUES MS. ABBOTT FOR DAMAGES FOR BREACH OF CONTRACT. CAN HE
RECOVER? IF SO, WHAT WOULD BE HIS MEASURE OF RECOVERY?
26
QUESTION 73
1 what was the scope of D's duty
11 only an estimate
12 implication
13 custom's existence
14 "widespread"
15 "almost all"
21 Intent to incorporate
22 Belindez
23 "recognize"
24 "observe"
25 "all the practices normal"
26 Abbott
27 she not make similar statement
unaware
28 new to business
31 express promise by her
32 oral promise by her
33 hers statements
34 "buy all"
35 "need"
36 his statements
37 "requirements"
38 she evidently did not disagree
41 Question #1: integration
42 test
43 here yes
44 especially given merger clause
51 Question #2: complete or partial
52 Wigmore
52 subject-matter
54 Williston
55 naturally, normally
56 Corbin
57 subjective intent
58 but this personalty K
59 UCC governs
59.1 test
59.2 objective
59.3 but "certainly"
61 facts Here
62 true merger clause
63 but certainly?
71 even if partial, cannot contradict
72 here
73 interpretation infra
81 interpretation of "80,0 tons"
82 step #1: identify all the possible meanings
83 objective approach
84 turn to extrinsic only if no plain meaning
27
85 text 80.00 seems exact
86 context
87 +100.00
88 "approximately"
89.1 "roughly"
89.2 contrast
89.3 "needs"
91 compromise
92 generally follow objective approach
93 but exception for trade custom
94 relevant here
101 subjective
102 prior oral statements
103 hers
104 "all"
105 "need"
106 his
107 "requirements"
108 "estimate"
109 "probably"
111 step #2: classify each meaning as a type of usage
112 popular
113 dictionary
114 numbers
115 yes
116 limited, trade
117 exists
118 "widespread"
119.1 "almost all
119.2 pertinent r
119.2 +both in business
119.2 -one new to business
119.3 +Frank told her "almost everything"
121 mutual
122 difficult
123 individual
124 Abbott
125 Belindez
126 "almost everything"
127 basis to prefer
131 Step #3: choice, order of preference
132 Williston
133 custom
134 Corbin
135 custom
136 individual?
141 conditions to activating duties
142 promise to deliver
143 constructive condition
144 alternating promissory conditions
145 fulfilled
146 made the prior deliveries
147 remaining delivery
148 prospective non-performance of the conditioned duty
28
151 therefore duty of immediate performance
152 not performed
153 no discharge doctrine applicable
154 therefore breach
161 damages
162 general
163 hypothetical measure
164 K price versus market price
165 but actual resale
166 able to resell at K price
167 successful mitigation
168 cumulative or exclusive
169 split of authority
171 specials
172 additional $300
173 award X to vindicate expectation interest
29
QUESTION 74
Ms. Azevedo owned a construction materials supply store in Fargo, North Dakota. She had operated the
store profitably for 10 years. In 1990, a physician advised her to more to a warmer area for her health. She chose
Morena for two reasons. First, she knew numerous members of the El Dorado construction trade. Second, with the
exception of climate, Morena was similar to Fargo; it was roughly the same geographic size, and it had
approximately the same size population and demographics.
In early 1991, she contacted Mr. Belindez, a general contractor in Morena. She said that although she knew
"a lot" of people in El Dorado, she had "just moved" there, She explained mat she was "on a very tight budget" but
wanted a store "just like" the one in Fargo. She gave him a copy of the blueprints for the Fargo store. After viewing
the blueprints. Belindez said that the roof would require "3,000 tiles." On January 10, 1991, they signed a written
contract for the construction of a new store in Morena. Clause #3 of the contract stated that by July 20, 1991,
Belindez would complete construction of a building complying with the blueprints on a site Azevedo had already
purchased. Clause #4 provided mat Belindez would supply "adequate roofing materials, including three thousand"
tiles. (In Morena, there was a widespread practice in the construction industry: The expression, "a thousand" tiles,
meant two truckloads of a certain size. At least 80% of the general and subcontractors in Morena were aware of the
practice.) Clause #15 staled that Azevedo would pay Belindez "exactly $130,000" on July 21, 1991. Clause #17 read
that the writing "includes the parties' entire agreement and supersedes any prior oral agreements."
Azevedo and Belindez spoke just before signing the writing. Azevedo said mat she was having second
thoughts and should be entitled to "an even better" deal, since there was so little work for contractors such as
Belindez. Belindez said that he could agree to "a $5,000 refund if the Index of Construction Cost, prepared by the £1
Dorado Commerce Department, declined at least 5% by June 30th." Azevedo suggested adding that term to the
writing. Belindez explained that he preferred keeping the agreement oral, since he did not want his competitors to
know he was offering such favorable terms. The two then shook hands and signed the writing.
Performance proceeded smoothly until late May when work began on the root Belindez delivered six
truckloads of tile to the site. (The six truckloads contained a total of 2,000 tiles.) Because of the peculiar roof design,
another thousand were needed. Azevedo demanded that Belindez furnish the additional tiles. When he refused, she
fired him. She then hired another contractor, Mr. Cameron, He completed job by September 20th for $140,000.
AZEVEDO SUES BELINDEZ FOR BREACH OF CONTRACT. IS SHE ENTITLED TO RECOVER?
WHAT WOULD BE HER MEASURE OF RECOVER? The Index declined 6% by June 30th. At trial, Azevedo
offers an accountant's uncontradicted testimony that her old store averaged $10,000 in monthly profits and that in
even the first few months of operation the new store averaged a $10,000 monthly profit The monthly fair rental
value of the property was $2,000.
30
QUESTION 74
1 duty to furnish tiles
2 scope of duty
3 P
4 adequate
5 OR 3,000
6 D
7 certain size truckload
11 IDENTIFY ALL THE POSSIBLE MEANINGS
12 objective approach
13 turn to extrinsic only if no plain meaning
14 text
15 3,000
16 if anything plain, numbers
17 context #1
18 "adequate"
19 "including"
19.1 NOT say "limited to"
19.2 context #2
19.3 "exactly"
19.4 cut in favor of finding precise number.
21 compromise approach
22 consider limited usage even if plain meaning
23 trade usage here
31 subjective approach
32 any meaning the language can reasonably bear
33 even numbers
34 precedents equating numbers with size
35 apply here
41 possible meanings
42 exactly 3,000
43 whatever necessary
44 happens to be 3,000
45 certain number of truckloads of certain size
51 CLASSIFY MEANING MEANING AS A TYPE OF USAGE
52 popular
53 3,000
54 limited
55 (1) existence
56 in construction in Morena
57 80%
58 (2) P on notice
59 -not member of construction trade
59.1 -"just moved"
59.2 -evidently did not know
59.3 +so widespread
59.4 +in construction supply business
59.5 +knew "a lot"
59.6 -in El Dorado, not specifically in Morena
61 mutual-exactly 3,000
62 P had that in mind
63 "tight" budget
64 in fact "very tight"
31
65 therefore D knew that P could not afford to ballpark
66 individual usage-exactly 3,000
67 perhaps D did not subjectively realize
68 but D should have known
69 "tight"
69.1 "very tight"
71 CHOOSE A MEANING
72 Corbin
73 if a mutual usage, choose that
74 if not, then limited usage
75 Williston
76 mutual usage only if reflected on face of writing
77 grudgingly then limited usage
78 otherwise popular
81 conditions to be fulfilled by P
82 #1: access
83 partially fulfilled-initially
84 later ordered off site
85 fail or excuse
86 propective non-performance
87 D refused to deliver the balance of the file
91 #2: payment
92 never made
93 fail or excuse
94 prospective non-performance
95 D refused to deliver the balance of the file
101 D's duty
102 not performed
103 breach or discharge
104 no facts triggering a discharge doctrine
105 material breach?
106 intentional
107 in some jurisdictions automatically
108 the roof important
111 damage
112 DAMAGES FOR FAILURE TO COMPLETE CONSTRUCTION
113 normal formula: contract price versus cost of new contractor
114 140,000 new contractor
115 original contract price 130,000
116 but refund could reduce price to 125,000
121 parol evidence problem
122 question #1: integration?
123 merger clause
124 definitely
131 question #2: complete or partial integration?
132 Williston
133 merger clause
134 but peculiar wording
135 "prior"
136 not say
137 reached this agreement after writing prepared
138 roughly contemporaneous
139 moreover, naturally or normally test
139.1 stated reason for not reducing to writing
32
139.2 reason plausible
139.3 Corbin
139.4 subjective intent
139.5 little weight to merger clause
141 if promise part of contract, entitled to refund
142 refund reduce K price to 125,000
143 15,000 for that element of damage
151 DAMAGES FOR DELAY
152 profits
153 -certainty principle
154 -new business
155 -some courts never
161 but even under the traditional view
162 amount of damage as well as the fact of damage
163 BUT +old store 10 years
164 +virtually identical store
165 +same size population
166 +same demographics
167 +track record
168 +expert accountant
169 +uncontradicted
169.1 plus $10,000 for each month of delay
169.2 two months
171 emerging view
172 only the fact of damage, not the amount
173 easier to recover
181 even if deny profits, not preclude all recovery
182 not "all or nothing"
183 rental value
184 $2,000
185 two months
33
QUESTION 75
For years Hr. Asdrubale owned a hockey team. However, he was frustrated with the game of hockey
because, in his words, "the rules permit games to end in ties, and I hate ties." In 1984, he sold his hockey team and
bought the Morena Eagles, an American Baseball League team.
Jake Bishop was the Eagles' star player. Jake was a poor fielder; he led the team in errors the past two
years. However, in both years he came close to winning the A.B.L. batting title.
In January 1985, Asdrubale held a meeting with all the players. At the meeting, he described his "personal
philosophy of excellence. I worked hard to become the biggest real estate developer in El Dorado -- number one by
a wide margin." He declared that he wanted to bring the same philosophy of excellence to the Eagles: "In
commercial realty, I'm the best. I don't settle for ties in business, and as a team we're not going to settle for the ties.
As individuals, you players are going to be the best." He added that to create incentives to achieve that goal, all
contracts were going to be revised to lower base pay but include large "philosophy of excellence" bonuses.
In February, with Bishop's consent, Asdrubale's lawyer rewrote Bishop's contract. Bishop's base pay was
reduced; but the new contract provided:
"PHILOSOPHY OF EXCELLENCE" BATTING BONUS. Owner agrees to pay Player an additional
$100,000 on the condition that Player wins the 1985 A.B.L. batting championship, as determined by the
A.B.L. Commissioner.
"PHILOSOPHY OF EXCELLENCE" FIELDING BONUS. Owner agrees to pay Player an additional
$50,000 should Player commit the fewest fielding errors of any Eagle player starting at least 80% of the
1985 regular season games or as few errors as any such player.
The A.B.L. awards its batting championship to the player with the highest batting. average at end of regular
season. On three prior occasions, two players had tied for the highest average; but the league had broken the tie by
considering the players' slugging averages (the total number of bases divided by the number of at bats, four points
for a homerun, three points for a triple, etc.).
At the end of the 1985 season, Bishop and Ozzie Williams of the Phoenix Wildcats tied for the batting title.
Bishop had the higher slugging average. However, with the concurrence of all team owners, the Commissioner
declined to break the tie; she declared Bishop and Williams co-winners of the title.
In December 1985, Bishop demanded the $100,000 batting bonus. Asdrubale refused to pay. He told
Bishop, "I thought I made myself clear. Ties make me sick. If you're not the very best--the one and only, there's no
bonus."
Bishop sues Asdrubale. At trial, the plaintiff introduces a copy of A.B.L. Bylaw IV.C. reading: "League
races cannot end in ties; if at the end of the regular season, two teams are tied in the standings, the winner shall be
decided by the outcome of a playoff game, to be scheduled by the Commissioner. For all other official league
purposes, ties are acceptable." The defense calls Professor Miriam Delgado, the chair of the University of SI Dorado
English Department. She testifies that the most popular meaning of the expression, "the A.B.L. batting
championship," would be a title won by a single person.
34
QUESTION 75
1 INTERPRETATION
11 Step #1: Identify all possible meanings
12 Subjective approach
13 All possible sources
14 Both meanings possible
15 Pure objective approach
16 Face of the document
17 No extrinsic evidence if plain meaning on face
18 Text – in the singular
19 Context – in the second clause
19.1 Only first
21 Modified objective
22 Trade custom
23 Bylaw IV.C
24 Again, both possible
31 Step #2: Classify each meaning as a type of usage
32 General: only one
33 Delgado
34 expert
35 "a single person"
36 "popular"
37 "the most popular"
38 Only first
41 Limited: tie
42 existence of usage
43 Bylaw IV.C
44 "For all other official league purposes"
45 Standing
46 Only first
47 notice of existence of usage
48 Both members of industry
49 Likely familiar with bylaws
49.1 but Asdrubale new to the industry
51 Mutual: only one
52 Evidence before contract formation
53 "philosophy of excellence" speech
54 his philosophy
55 for club
56 for player as well
57 Evidence on face of writing
58 title of clause
59 context
59.1 contrast to wording of other clauses
61 Individual: only one
62 Existence
63 "hate ties"
64 "don't settle for ties"
65 "the best"
66 "make me sick"
67 "the very best"
68 "the one and only"
69 Notice
35
69;1 speech
69.2 Baskam attended
71 Step #3: Choose a meaning
72 Primary basis: order of preference among the types of usage
73 Corbin
74 mutual
75 therefore the one and only
76 Williston
77 mutual only if reflected on face of writing
78 arguably
79 otherwise limited
79.1 different choice than Corbin on these facts
81 Secondary basis: canons or maxims of interpretation
82 contra proferentem
83 Asdrubale
84 Asdrubale's attorney
85 Not as much weight as in the past
91 CONDITION
101 Condition: Construe as including a tie
102 condition fulfilled
103 duty of immediate performance
104 not performed
105 no evident discharge doctrine applicable
106 therefore breach
111 Condition: construe as requiring first
112 express or constructive condition?
113 language key
114 "on the condition"
121 if constructive
122 excuses
123 substantial performance
124 past practice
125 Ties but slugging average
126 Baskam higher slugging average
127 Purposes
128 Publicity
129 Co-winner
131 Impossibility
132 Third party intervention
133 Commissioner
134 Material part of the bargain
135 Debatable
136 Foreseeable?
137 Past intervention
138 Several times
139 Always broke the tie
141 if express
142 excuses
143 Substantial performance inapplicable
151 Prevention
152 Wrongful?
36
153 Causation
154 Concurred
155 Need concurrence?
156 Need concurrence of all owners?
161 Avoidance of severe forfeiture
162 Applies even to express conditions
163 Material part of the bargain
164 debatable
165 Severe enough?
166 Restatement example: 15%
167 Rest of salary?
168 Not enough facts