Subjective Approach to Interpretation

K for the Sale of cotton, 2 ships named "Peerless". One left Oct, one left Dec.

Parties each thought different month. B/c using subjective approach, no K.

Modern Objective Approach to Interpretation

Commercial lease for land that was to be dvlp'd by tenant. Disagreement about whether Adams had to build buildings, or just prepare streets, plumbing, etc. Remanded b/c trial court failed to consider whether parties had reason to know of other party's meaning.

Modern Interpretation Court

Taylor signed release of claims for State Farm. Holding: release form did not include the tort claim of bad faith b/c release was ambiguous; therefore, PE should be admitted. Was reasonably susceptible to multiple interpretations. State Farm used broad language, knew what language to use if mean to include bad faith claims.

Classic Interpretation Court

Opposite result of Taylor v. State Farm b/c classic court. Excluded extrinsic evidence offered to show that parties who signed general release did not intend it to apply to mortgage loan made by D to Ps. Release had nothing to do w/ the loan. 

Frigaliment Importing v. BNS Int'l Sales

Chicken Case

CL PER --> Classic Court

D Hastings said there was a warranty of quality of logs. Offered oral testimony to prove existence of warranty. Exception (that PER does not apply if it was not the intent of the parties to finalize the agmt) does not apply here

B/c to add the warranty, there must be a collateral agmt to evidence the warranty. Doesn't exist here b/c collateral agreement must relate to a subject distinct from that to which the writing relates.

Fraud Exception to PER (classic court)

P says there was only to be 25k yds3 of dirt moved. D said 2x as much. Confusion b/c they called it "Lump Sum". P said he signed in reliance on bid of lower amount. Merger clause. P threatened to w/hold payment if D didn't signed the 1st K. Found for D b/c written merger clause supercedes.

Cardozo -- Implied Terms

Fashionista employed P who was to have exclusive right to place her endorsement in designs of others. She would receive 1/2 profit. Court hold that there was an implied term that employee was to use "best efforts." Otherwise, he wouldn't be obliged to do anything.

Cardozo: will not start off thinking that promise is illusory. Rationale: intent of the parties

Implied Obligation of GF

Seidenberg and Raymond formed brokerage firms, sold stock to Summit Bank. K acknowledged parties' joint obligation to work together, but bank was stagnant. Found for P. Look at purpose of K and expectation of parties. Dist Ct wrong to exclude PE b/c GF was in the K, just implied.

Old - Implied Obligation of GF

Invested funds in clamming vessels. Boss exercised notice of termination. Didn't orde any clams at time of termination. Unequal bargaining power. Operator preyed on Thunders' lack of sophistication.

Implied Warranty of Merch/FFPP

"prop matrices" showed ability of boat's engine capacity. crow bought boat and put more weight on it than in matrix. Court hold for D in that prop matrices were not an implied warranty of merchantability or fitness for a part'r purpose. Brochure was not express warranty.

Incompentency

Hauer signed loan docs for Eibes after sustaining head injury after motorcycle accident. Was on disability + interest from hefty mutual fund. Bank knew/should have known that she lacked the mental capacity. She had been assigned a guardian that was later terminated. Eilbes took bank proceeds. Consequence of voiding the K by a mentally incapacitated person is that they have to give back the money. Unless there are special circumstances, like here (BF). So she didn't have to pay back the $30k

Economic Duress

K to transport construction materials from Houston to AK. Not enough picked up, not properly piled, traveled slowly, hurricane, Alyeska unloaded w/o Totem's consent (voided their insurance). Alyeska terminated and said payment time indefinite, but Totem had creditors. SJ reversed on issue of whether there was econ'c duress. 

Undue Influence

Teacher signed next year's K, got criminal charges for homosex'l activity. Straight out of jail, boss at his house said that if he didn't sign resignation papers, they would put it in the paper and fire him. He resigned. Charges later dropped and sought reemployment. Should have gone to jury. Not fraud b/c the party did not know the falsity of their action. Not mistake b/c both parties knew all the facts.

Misrepresentation

68 year old woman sold 3222 hours of dance lessons for $29k. Was promised she would soon be a prof'l dancer. Charmed by instructor. Release was signed. Found for P.

UBER NERD: When a Non-Disclosure is a Misrepresentation

wife had false impression that her husband was in danger of imminent arrest. Creditor let her keep thinking that. True he owed the debt, but creditor failed to mention that he wouldn't be arrested immediately.

Non-disclosure

Trailer park had problems known b/c health officials came. They make statements to prospective residents. After the health officials came, these statements became misleading. 

Nondisclosure as Misrep... real estate

Jones sold house and told Hill that there were no termites. There was a K integration clause, but E can always be used to show fraud, even though it has effect of varying terms of a writing. Caveat emptor dead. there is a duty to disclose. 161 Modern view: vendor has aff'v duty to disclose mat'l facts where...

misrepresentation/Fraud in the execution

Park100/Scannell marketed Kartes to lease video store. Original lease did not have personal guaranty. Scannell got them as they were closing and rushed them to sign a paper. Called lawyer who said lease was apprv'd. Scannell didn't explain the difference. 

Unconscionability

Ps bought from door to door. Add on clause: all payments applied to ALL previous purchases, paid off or not. Sold to lady on public assistance. Door to door pressure was procedural unconscionability. Signed a blank form. 

Higgins v. Sup'r Court

(Extreme Home Makeover)

Mistake

Pickles bought property w/ merger clause "accept same in present condition". Seller's predecessor installed septic tank w/o permit. Court held K was not voidable b/c of "as is" clause. Both parties were mistaken as to basic assumption... that purchase would be profitable. There was mat'l effect. BUT... they assumed the risk.

Impracticability 

Agreed to purchase and extract from land at fixed prices. Gravel removal below the water level was 10x more expensive. Nonperf was justified (not what they K'd for). 

Impracticability

IH left farm equipment industry b/c of market downturn. Wendt had a dealership deal and didn't get a franchise. Impracticability defense not allowed b/c there was no implied term that K was not perpetual as D tried to assert. Defense not appropriate for market changes.

Modification

Notwithstanding "no strike" provision, went on strike during big deal w/ Bank of Amer. Employer agreed to increase pay, but reserved the right to sue the Union. 5-4 decision.

Modification and Economic Duress

Fishermen were on a boat from SanFran to Ak, they stopped work in a body demanding more $. The supintendant advised that he didn't have the authority, but signed off on the increase. Mod. didn't work b/c of the economic duress argument. The consent was given w/o consideration. 

Breach - express condition

Sublease would be null and void if LL's consent wasn't sent directly in writing to subleasing tenant. Substantial performance wasn't enough. Only applies to constructive or implied in fact conditions

Constructive Conditions

Buyer requested Reading pipes, some of the pipes weren't. Codozo's issue: Is a trivial, non-fraudulent, non-willful omission in perf breach? Subst'l perf applied b/c breach was immaterial.

Material Failure

Sackett failed many times to pay on time. Spindler said there would be no sale. Sackett sues for breach, claims Spindler discharged his duty to pay. Letter back did not discharge his duty. Was total breach by factors in 241,242. Spindler was justified b/c he was extremely uncertain as to whether Sackett intended to complete the K.

AR

Schupf selling Flatt land. Sale contingent on P obtaining zoning permission. Town objected, so P sent letter offering clients to change price term. rejected. P did not repudiate the K. Even if they had, retracted b/c D did not give notice that they were treating letter as a repudiation, K as rescinded. Did not materially rely either.