Contract Performance and Breach: Understanding Promises, Interpretations, and Hierarchy
Dive into the complexities of contract interpretation, exploring promises, plain meaning vs. reasonable interpretation, special cases like insurance contracts, and the hierarchy of interpretation rules. Discover how to navigate the muddle of multiple approaches, conflicting rules, and definitions of ambiguity to draft contracts carefully and handle contingencies, risks, and conflicts effectively.
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Presentation Transcript
WAS THE CONTRACT PERFORMED OR WAS THERE A BREACH? To answer this question we have to determine what was promised? To answer this question we have to determine what was promised? What were the parties justified in understanding was promised? What were the parties justified in understanding was promised? Plain meaning versus reasonable interpretation Plain meaning versus reasonable interpretation The special case of insurance contracts: The special case of insurance contracts: C & J C & J Fertlizer Fertlizer Plain meaning and the Merchant of Venice Plain meaning and the Merchant of Venice Bargaining in the Shadow of the law Bargaining in the Shadow of the law
HIERARCHY OF INTERPRETATION (1) (1) Trade Usage R2 Trade Usage R2 222; UCC 222; UCC 1 1- -303 303(c) (c) (2) (2) Course of Performance R2 Course of Performance R2 202(4); UCC 202(4); UCC 1 1- -303(a) 303(a) (3) (3) Course of Dealing R2 Course of Dealing R2 223; UCC 223; UCC 1 1- -303(b) 303(b) (4) (4) Express Terms Express Terms Hierarchy: R2 Hierarchy: R2 203(B); UCC 203(B); UCC 2 2- -208(2), 1 208(2), 1- -303(e) 303(e) Actually, order is as above, if you can get that evidence before the court Actually, order is as above, if you can get that evidence before the court
RULES IN AID OF INTERPRETATION (1) (1) R2 R2 202, 206, 207 202, 206, 207 (2) (2) UCC UCC Reasonable interpretation UCC Reasonable interpretation UCC 1 1- -302(b) 302(b)
INTERPRETATION IS A MUDDLE Various Approaches Various Approaches Multiple Interpretations of its Hierarchy Multiple Interpretations of its Hierarchy Multiple and Conflicting Rules in Aid of Interpretation Multiple and Conflicting Rules in Aid of Interpretation Multiple Definitions of Ambiguity Multiple Definitions of Ambiguity Multiple Approaches to Extrinsic Evidence Rule Multiple Approaches to Extrinsic Evidence Rule
DRAFT CAREFULLY Understand the Situation Understand the Situation Understand Contingencies Understand Contingencies Understand Risks Understand Risks Understand Potential Conflicts Understand Potential Conflicts Understand Potential Mistakes and Misunderstandings Understand Potential Mistakes and Misunderstandings Plan for the Unexpected Plan for the Unexpected Be Precise Be Precise
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