Trujillo Contracts: Vague Terms
Here is a case from my Contracts class which explains the concept of Vague Terms. And in this case, there are evidently two different meanings of “what is a chicken?”
Case Name, Citation Number, Author
Frigaliment Importing Co. v. B.N.S. International Sales Corp, 22 Ill.190 F. Supp. 116 (S.D.N.Y. 1960)
Plaintiff (Frigaliment) sues Defendant (BNS International Sales Corp) for not complying with the weight requirements of the contract. But more so for not complying with the term “Chicken”–which to them means “young chicken.”
–Defendant contacted to sell chickens to Plaintiff.
–The contract stated that the Defendant would be selling specified amounts of 2 1/2-3lb chickens and 1 1/2-2lb chickens.
–When the first shipment was sent, the Plaintiff found that the heavier chickens were not “young” and were not suitable for broiling or frying–only stewing.
–The parties then disagreed as to what the term “chicken” means in the contract
What is a Chicken?
Chicken in the contract does not mean only younger chickens
–Since the Defendant’s definition coincided with one or more the objective meaning of: (1) Language of the contract, (2) Negotiation history, (3) Industry standards (4) Applicable governmental regulations (5) Conduct of the parties after making the contract (6) Transactional context, the Plaintiff did not meet its burden of showing that the narrower definition of the term (younger chicken) applies.
–The objective meaning of chicken, from the Defendant, coincides with the dictionary definition, Department of Agriculture’s regulations, some trade usage, the realities of the market, etc.
Restatements 201″Whose Meaning prevails”: To determine or prove what the parties knew, or should have known, of the other’s meaning we look at:
(1) Language of the contract
(2) Negotiation history
(3) Industry standards
(4) Applicable governmental regulations
(5) Conduct of the parties after making the contract
(6) Transactional context
Restatements 201 (1): Where the parties have attached the same meaning to a promise or agreement or a term thereof, it is interpreted in accordance with that meaning.
(2) Where the parties have attached different meanings to a promise or agreement or a term thereof, it is interpreted in accordance with the meaning attached by one of them if at the time the agreement was made (a) that party did not know of any different meaning attached by the other, and the other knew the meaning attached by the first party; or (b) that party had no reason to know of any different meaning attached by the other, and the other had reason to know the meaning attached by the first party.
(3) Except as stated in this Section, neither party is bound by the meaning attached by the other, even though the result may be a failure of mutual assent.
As silly as this does sound, this is a clear example (in contracts) of a term with a clear core meaning, but a meaning beyond the clear core meaning. I hope that is clear? 🙂
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