Perf. Phase: Interpretation (Interp.)

Broad Overview of Perf. Phase

  1. P's Cond's (conditions)
    1. Fail
      1. No duty of imm. perf. & P has no C/A
    2. Fulfill / Excuse
      1. Duty of imm. perf. on D
  2. D's Duty of Imm. Perf. (immediate performance)
    1. Breach
      1. P can have C/A
    2. Perf. / Discharge
      1. P has no C/A


  1. Two Quest's
    1. What 2 Interp
      1. Parol evid. rule (PER)
      2. Incorporation (incorp.) by reference (ref.)
      3. Implication
    2. How 2 Interp.
      1. ID all possible meanings the lang. can bear
      2. Characterize each meaning as a type of usage
      3. Select a meaning
      4. Given the meaning, legal effect of lang.
  2. Interp. v. Construction
    1. Interp. then construe
    2. Interp. 2 find meaning
    3. Construction 4 legal effect of provision
      1. Whereas clause of mere recital of facts
      2. Cond. 2 somebody's duty
      3. Duty
      4. Promissory cond. where both prom. & cond.

What 2 Interp.

  1. PER
    1. Def.
      1. If written K (substance), then prior/contemp. evid. inadmissible (proced.)
      2. Narrows the scope
    2. Trier of facts in oral v. oral & writing v. oral evid's
      1. Jury dec's in oral v. oral
      2. Judge dec's writing v. oral
    3. Integration (integ.): Is the writing an integ?
      1. Three dif. possibilities: Can use parol evid. ALWAYS 2 explain
        1. Written K not an integ. & parol evid. admitted 2 explain, suppl., / contradict
        2. Partial integ. then can admit parol evid. only 2 explain & suppl.
        3. Compl. integ. then only 2 explain ambiguities
      2. Contradictions
        1. Maj. construe narowly
        2. Only admit parol evid. 4 expressed terms & not w/implied terms
      3. Def.
        1. Integ. when intended 2 B final
          1. Final embodiment of @ least part of the doc.
          2. Note / memo under S/F is not an integ. 4 PER
        2. Judge consid's all of the writing
          1. Writing nulls / supersedes oral
    4. Compl v. Partial Integ.: If it's integ., which is it? (split of auth.'s on this)
      1. Conservative Tests
        1. Wigmore Test
          1. Subj. matter test of if writing deal w/subj. matter of oral
          2. Judge must examine the writing, parol evid., & then compare
        2. Williston Test (maj. jxn)
          1. Judge consid. writing & parol evid.
          2. If normally & nat'ly incl'ed in writing, then compl. integ.
          3. Find compl. integ. a lot by this test
        3. If purport 2 B compl, then conservative have lots of wt. so ex. of merger clause superseding all others
        4. Goals of conservative tests
          1. Apply what's in writing
          2. Max. commercial stability & cert. in process
          3. Cost of frustration of indiv. parties v. eff. & predictability 4 client & ct.
          4. Doubt jury on ability 2 properly weigh
      2. Liberal Tests
        1. Corbin Test (endorssed by Traynor)
          1. Depreciate writing & appreciate extrinsic evid.
          2. Not accept compl. on its fact & want 2 see it actually incl'ed in K, not nat'ly
          3. Dislike Wigmore test b/c subj. matter not self def'ing term & not yield predicabiltiy / cert.
          4. Dislike Williston test b/c uncert. in the process
        2. UCC 2-202 (Comment 3)
          1. Whether rsbl 2 incl. additional in the writing by rsbl parties
          2. Obj. test but not as far as Corbin test
          3. Substitutes normally & nat'ly w/certainly of Williston test so partial integ. gen'ly
      3. Co-existence of Views
        1. Maj. follow Williston but UCC 2-202 4 pers. prop
    5. Exceptions 2 PER
      1. Consistent Oral Cond. Precedent 2 Effectiveness of Written K
        1. Consistent & nat. of cond. precedent 2 writing testing effectiveness of writing as K
        2. Not really an exception b/c rel. 2 formation phase of negating finality 2 find a K
        3. Abused doc. b/c should only allow evid. of non-K but ct allows perf. phase evid.
      2. Proof of Facts Triggering Enforceability Doc.'s (mistake, fraud, etc.)
        1. Not really an exception b/c if facts negate enforceability, back up 2 formation phase
      3. Sep. Collateral Oral Agmt: Sep. Indep. Compl. Oral K
        1. View 1: Not recog.
        2. View 2: Recog. but not permit contradiction
      4. Subseq. Oral Modification
        1. Not part of PRE b/c PRE only excl. prior / concurr. oral agmts
        2. No oral modification clauses R creation of the parties so should B able 2 rescind later
        3. Maj. View: Rest & UCC 2-209
          1. Sub 2: gen'ly will give effect 2 no oral modific. clause 4 good busi. practice
          2. Sub 5: list circ's of not enforcing & stand. 4 enforce when rsbl notific. received by other party & unjust b/c material change of position by reliance
          3. Substance over form so only dep. on irreversible reliance, not on express waiver
        4. Musmanno View: Need express waiver so form over substance
  2. Incorp. by Ref.
    1. Expands the Scope
      1. Adeq. manifest intention 2 incorp. by ref. of writing, oral, / custom is fine 2 trigger the doc.
  3. Implication
    1. Policies
      1. Human can't foresee everything
      2. Mechanical enforcement leads 2 lopsided result so rewrite K's
      3. If not result in lopsided result, gen'ly won't imply terms
    2. PRE & Implication
      1. If PRE precl's oralevid., then that part. oral evid. can't B consid'ed 4 implication
    3. Three Types of Implication
      1. Implied in fact terms by actual intent
      2. Implied in fact terms by interp. intent
      3. Implied in law terms w/o intents
    4. Implied In Fact Terms By Actual Intent
      1. Subj. test that actually / probably had provision in minds during barg'ing
      2. Quest. of inference
      3. Evid. 2 Imply From
        1. Structure of barg
        2. Course of dealing: series of deals btwn same parties of other K's where acted consistently even though no express prom.
        3. Trade custom: expect member of trade w/cert. oblgn & change those by express negation
    5. Implied In Fact Terms Based on Interp. Intent
      1. Parties' orig. subj. intent +
      2. Rsbl obj. parties stand. b/c of unforeseen devt & apply what rsbl parties would think nec.
      3. Making new K 2 fill in the gap of unforeseen contingency
      4. Corbin analysis states only imply gap when rsbl & nec. 2 avoid 1 sided & lopsided result b/c lwring freedom of K
      5. Dif. from 1st implied in fact terms b/c fund. orig. intent not effectuated unless imply
    6. Implied In Law Terms
      1. No parties' orig. intent
      2. Use obj. soc. norms that dictate & override implication
      3. Ex's of good faith & UCC 4 any type
    7. Implied Prom's
      1. Best effort (2nd implied in fact)
      2. Maintain level of reqt: C/L div'ed but 2nd implied in fact if recog.
      3. Good faith
        1. Implied in law
        2. Gen'ly no relief unless can show alt. motive other than no profit
    8. Limitation of Implication
      1. Can't imply if contradict express lang. of K
    9. Explicitly Draft Foreseeable Prob.

How 2 Interp.

  1. Agmt
    1. Words R symbols which acquire meaning by usage / convention
  2. Interp. Process: Structured Policy Driven Process
    1. Proced.: ID all possible sources / meanings
      1. Intrinsic material of text of part. writing, K 4 words itself, dictionary & context of part of K in same page, other pages, etc.
      2. Extrinsic material of prelim. negotiations, ind. stand's, & trade custom
      3. Subseq. conduct before falling out as circ. evid.
    2. Stand. of Proof: Characterize Each Meaning As Type of Usage
      1. Pop. / gen.
        1. Dictionary / avg person's def.
        2. Pub. opinion survey
      2. Limited
        1. Geog. areas, trade custom, / part. trade in geog. area
        2. Est. existence of usage (see split btwn obj. v. subj. below)
        3. Party knew / notice of existence b/c long term member of trade
      3. Mutual
        1. Meaning both parties had @ X of K
        2. Est. when 1 says & other hears
      4. Indiv.
        1. Dif. meaning each parties had @ X of K
        2. Pers. knowledge of S/M before signing
        3. If agents, bound by what they say in participation of negotiation
      5. Each type is quest. of fact
    3. Order of Pref: Select A Meaning
      1. Policy arg. & quest. of law
      2. Primary basis 4 order of pref.
        1. Williston v. Cobin
        2. Both agree order of pref. adeq. basis enough 4 analysis
        3. Both agree if pop. v. indiv., prefer pop.
      3. Secondary basis
        1. Canons / maxims if primary fails
        2. Vague so can't rely on them & if ct does, masking policy
        3. Commercially rsbl interp.
          1. If part. interp. makes 1 side lose a lot, not pick that 1
        4. Expressio unius
          1. Expressly mention 1 thing, then negly imply excl.
        5. Ejusdem generis
          1. Gen'ed lang. @ the end of K must B construed contextually by K lang.
          2. Limiting maxim b/c take same common denominator as expressed term
        6. Indep. Force & Effect
          1. Ct. would pick interp. that's indep. force & effect if 1 interp. indep & other redundant 4 interp'ing clauses
          2. Reject surplussage b/c drafters wouldn't want it
          3. Hurried process, then this maxim not make sense
        7. Parties View of All Clauses
          1. If parties look @ all clauses, simultaneous signing, then meaning of 1 can elim. ambiguity of another
        8. Contra Prefertum
          1. Draft K precisely / resolve ambiguities against drafters
        9. Pub. Int. of Free Alienability (in real estate)
  3. Obj. v. Subj. in Proced, Stand. of Proof, & Order of Pref.
    1. Obj. Approach (Williston, maj. jxn)
      1. Proced.: if see plain meaning on face of writing no extrinsic so need 2 find ambiguity 2 admit extrinsic material
      2. Proof: skew so that only need writing & dictionary so want strict stand. 4 trade custom (Williston)
      3. Policy 4 Pref. of Order: gen'ly prefer pop. & not use indiv, mutual, / limited usage w/o more
        1. Mutual if reflected on K's face like glossary
        2. Limited, grudgingly b/c not want 2 force busi. into writing
        3. Pop.
        4. Mutual
        5. Indiv.
      4. In each step, skewed 2 reach pop. usage
    2. Subj. Approach (Traynor, Friendly, Corbin, & UCC)
      1. Proced.: no need 2 find ambiguity before going 2 extrinsic material
      2. Proof: Corbin wants lax stand. of proof b/c like parties' intent & UCC 1-205)2 says reg. justifiex expectation will B observed so relaxes on trade custom stand.
      3. Policy 4 Pref. of Order: Corbin likes parties' intention b/c plain meaning is illusory
        1. Mutual
        2. Limited
        3. Pop.
        4. Indiv.
      4. UCC 2-202)a allows course of dealing, usage of trade, / course of perf. w/o use of ambiguity
    3. Consistency
      1. Must follow same policy in each step of either obj. / subj. 4 consistent result

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