6: Interpretation Flashcards
(7 cards)
PER v. Interpretation
PER: can a party prove an agreement that is outside the written K? ; Interpretation: what is the meaning of words in a K? (interpret in way that is commercially reasonable)
Methods of Interpretation (2 Steps)
(1) start w/ language of K, dictionary definitions, canons of construction (e.g. words used in 2 parts of K have same meaning in both); (2) refer to Rules in Aid of Interpretation (R202)
UCC 2-202(2): Interpretation Method 1
Terms may be explained or supplemented by course of performance, course of dealing, or usage of trade
R202: Rules in Aid of Interpretation
(1) words interpreted in light of all the circumstances and principal purpose is given great weight; (2) writing is interpreted as whole and all writings that are part of same transaction are interpreted together; (3) unless a different intention is manifested (a) where language has generally prevailing meaning then interpreted in accordance w/ that meaning and (b) technical terms/words of art given their technical meaning when used in transaction within their field; (4) any course of performance accepted without objection is given great weight where agreement involves repeated occasions for performance; (5) manifestations of intention of parties are interpreted as consistent with each other and with any relevant course of performance, course of dealing, usage of trade
R203: Standards of Preference in Interpretation
(a) interpretation which gives a reasonable, lawful, and effective meaning to all terms > interpretation which leaves part unreasonable, unlawful; (b) express terms > course of performance/dealing/usage of trade, course of performance > dealing/usage, course of dealing > usage; (c) specific and exact terms > general language; (d) separately negotiated/added terms > standardized terms
PG&E v. Drayage: PER for Indemnity Clause
Intention of parties as expressed in contract is source of contractual rights/duties, so exclusion of relevant extrinsic evidence to explain meaning of written instrument could be justified only if it were feasible to determine meaning from instrument alone; here, writing was ambiguous and evidence was admissible
Frigaliment v. BNS: Chicken
“Chicken” included stewing chicken; burden of proof is on P, D proved that his belief had been objectively reasonable and P failed to show that the intent of the parties was something different (looked at K definition, course of performance, course of dealing, trade usage, price, conduct)
