Class 3 Notes

Simmons V. Hill: Review.

Claim 1:
Breach of contract

Claim 2:
Promissory estoppel

The Language of the UCC provision:
UCC 2-202: Final Written Expression: Parol or Extrinsic Evidence.

Terms with respect to which the confirmatory memoranda of the parties agree or which are otherwise set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement but may be explained or supplemented

• (a) by course of dealing or usage of trade (Section 1-205) or by course of performance (Section 2-208); and
• (b) by evidence of consistent additional terms unless the court finds the writing to have been intended also as a complete and exclusive statement of the terms of the agreement .

Parol Evidence Rule:
MCC-Marble V. Dagostino
Dispute about material in effect on the back of the form
Is it partial or complete?
does the oral statement contradict with the written document?
Parol evidence rule takes effect!

There are affidavits saying that  that the terms wouldnt apply and therefore once the court considers in this case what thye plaintiff is argueing proving this case is easier than other cases which turn into into inevidably to a he-said-she-said case.

We want poeple to be able to prove contract modifications therefore we allow exceptions to the Parol Evidence Rule.
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4 - Exceptions based on Ambiguity:
1. Courts wont hear manufactured ambiguity
2. Ambiguity can come from failure to explain and identify the meaning of a word for the said contract.
3. Ambiguity can also be created by the way the contract is written. Such as conflicting provisions in the same contract.

Frigaliment Importing Co. v. B.N.S. International Sales Corp:
Frigaliment brought this lawsuit for breach of warranty on the grounds that BNS International delivered goods that did not meet the specifications of the contract.

Issues

1. Does a party who seeks to interpret a contract’s ordinary terms in a narrower sense than is used in everyday trade have the burden of proof to establish that meaning?
2. Is parol evidence admissible to show the meaning of an ambiguous term and its usage in a contract?

Holding and Rule:

1. Yes. A party who seeks to interpret a contract’s ordinary terms in a narrower sense than is used in everyday trade has the burden of proof to establish that meaning.
2. Yes. Parol evidence is admissible to show the meaning of an ambiguous term and its usage in a contract.  
   

Raffles v. Wichelhaus: a classic contract law opinion in which the parties contracted for the sale of cotton on the ship “Peerless” but did not realize that there were two ships with the same name. The court held that there is no mutual assent to contract if a latent ambiguity arises showing that there was no meeting of the minds.

Raffles v. Wichelhaus (The Peerless Case): holding that there is no mutual assent to contract where a latent ambiguity arises that shows there was no meeting of the minds.

Issues:

1. If a latent ambiguity arises that shows that there had been no meeting of the minds, have the parties given mutual assent to contract?
2. Is parol evidence admissible to determine the meaning each party had assigned regarding a latent ambiguity?

Holding and Rule:

1. No. If a latent ambiguity arises that shows that there had been no meeting of the minds, there is no mutual assent to contract.
2. Yes. Parol evidence is admissible to determine the meaning each party had assigned regarding a latent ambiguity.

Milward

Subjective intention is of no avail unless stated at the time of the contract. The words “to arrive ex Peerless” only means that if the vessel is lost on the voyage the contract is to be at an end. It would be a question for the jury as to whether both parties meant the same ship called Peerless. That would be so if the contract were for the sale of a ship called the Peerless but this is only for a sale of cotton aboard that ship.

Mellish

A latent ambiguity appeared when the contract did not specify which ‘Peerless’ was intended. There is nothing on the face of the contract to show that any particular ship called Peerless was meant but the moment it appears that two ships called the Peerless were about to sail from Bombay, there is a latent ambiguity. Parol evidence will be admissible for determining the actual meaning that each party assigned to that ambiguity. From the evidence presented, each party attached a different meaning to that ambiguity. If different meanings were intended on a material term of a contract, there is no mutual assent and there is no contract.

Notes

Restatement (Second) Section 20(1): If the misunderstanding concerns a material term and neither party knows or has reason to know of the misunderstanding, there is no contract. Parol evidence is admissible to determine the meanings of terms when a latent ambiguity arises later.

Courts are more likely to seek crediting one of the interpretation however if based on the evidence the court cannot credit the interpretations the court will make the ambiguous formation of the contract to be unreasonable and therefore more broad not narrow in it's interpretation
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