Contracts I Outline

AGENCY
-	Consensual relationship one person acts on behalf of Principal and is subject to their control
-	Authority to act only within the scope of agency authority
-	Fiduciary responsibility; trust and confidence, bound to act in each other’s interest
2 Types of Authority which Bind the Principal:
1.	Actual Authority: Real authority granted by the principal, doesn’t matter if 3rd party knows 
a)	Express authority A § 140, §`144
b)	Implied authority A § 7
2.	Apparent Authority: A § 159 3rd party is reasonable in believing that agent has authority, through
                                       the eyes of 3rd party.  Conduct of principal would cause a reasonable party to
                                       believe agent is authorized by principal

ALL 3 CASES NH S.Ct
Monge v. Beebe Rubber Co.
Holding: 	Termination by the employer of an at will K which is motivated by bad faith or malice or based on retaliation is not in the best interest of the economic system or the public good
 CONSTITUTES A BREACH OF THE EMPLOYMENT K

Howard v. Dorr Woolen Company
Wrongful dismissal brought by widow-about age and illness
Holding: 	Reinterpretation of Monge: Applies only where employee is discharged because did an act which public policy encourages or refuses to do what public policy condemns
-	No act done by getting old and sick, doesn’t meet legal standard
-	Other remedies exist for this type of discharge

Cloutier v. A&P
-	money left in safe because not safe to transport, manager fired after it’s stolen
2 PRONGED TEST:
 Firing motivated by malice, bad faith, retaliation
-	Objective not subjective-Evidence includes: rudeness, acting hypocritically, arbitrary
 Discharge is offensive to public policy
- Performance of an act encouraged by public policy or refusal to perform an act condoned by policy

I.  Classical System of Contract Law
A.	Mutual Assent-must be mutual agreement on an exchange of promises
1.	Objective Theory of Contract
a)	Meeting of the minds-voluntary expression of commitment
b)	Absent fraud, duress, or mutual mistakeno meeting of the minds, a party that signs a written K is bound by its terms- Ray v. Eurice Bros.- claimed intent immaterial, where writing expresses clear terms, cannot be unilaterally changed- i.e. unilateral mistake
c)	A party that signs a written K is presumed to know and understand contentsbound by terms if there is no fraud or misrepresentation.  St. Landry Loan Co. v. Avie
Same unilateral mistake as in Ray v. Eurice Bros.
2.	Bilateral Contracts: Offer and Acceptance
Envisioned process:
(1)	Preliminary negotiations- willingness to enter into bargain not an offer; assent doesn’t conclude § 26, Lonergan v. Scolnick
(2)	Offer: Direct, complete proposal for K providing for exchange of defined performances, which has an effect of providing “power of acceptance”; assent concludes  § 24
Offer takes effect on date when person  receives it
(3)	Acceptance: Power to accept created by offer; legally effective way § 50, 58, 60, 63, 69
(4)	“Mirror Image Rule”-Acceptance which doesn’t mirror offerCOUNTEROFFER §59 and rejects original offer Normile v. Miller. 
       Power of acceptance terminated with rejection.  § 38
       Power of acceptance terminated by counteroffer §39
       Power of acceptance is terminated  when received by offeror §40
Offeree cannot revive by any subsequent actions to accept.  Normile v. Miller
(5)	Revocation-can revoke any time until acceptance.  Must be properly communicated.
       Indirect, reliable communication of revocation is sufficient §43

Lonergan v. Scolnick
-	not an offer because letter not intended as expression of fixed purpose to make definite offer, saying yes not enough-further expression of assent necessary
-	void for vagueness-material terms not defined

Henthorn v. Fraser
MAILBOX RULE- Acceptance is effective when deposited in the mailbox
       -   as long as the mode of communication is within ordinary usage of mankind, acceptance 
            complete as soon as posted
       -   this is fair because offeror can control terms of offer and specify method of acceptance
      Incorrect Address-no mailbox rule
      Revocations only effective when communicated to offeree-i.e. Receipt of letter or knowledge 
        from reliable source

Normile v. Miller
-	Qualified or Conditional AcceptanceCounter-Offer and Rejection of Original Offer-can no longer accept original 
-	Existence of offer is stipulated by offeror
-	An option K- need promise to exclusive right, or to hold open-requires separate consideration
-	Information from reliable source about revocation functions as effective revocation

3.	Unilateral Contracts: Offer and Acceptance
a)	Definition:  Offer to exchange a promise of future performance only in return for offeree’s rendering of performance in the present.
b)	Classical doctrine: Performance is acceptance and consideration.  Acceptance is not given until act is complete so offer may be revoked any time prior to completion of the act.
c)	Notice of act completion is required when it is not otherwise evident.  Promisee is bound to give notice of acceptance within reasonable time after acceptance (performance of the act).  Bishop v. Eaton-use mailbox rule to uphold notice.  Petterson v. Pattberg- strict application.  Offeree ready to perform, offeror doesn’t open door , revokes before $ is handed to him.  Dissent: offeror who prevents the completion of the requested is in violation of K
d)	Protection against unilateral K: K formed when performance begins § 45  Won’t work if it is clear the offeror was only looking for an act rather than a promise to act. (i.e. I promise to look for the dog)
 
B.	Consideration-“Bargained for exchange”-prevents the enforcement of mere promises
1.	2 theories of consideration:
a)	Benefit/Detriment Test: Consideration consists of a benefit to one or a detriment to another.  Disjunctive test.  Can be a promise, forbearance, abandoning a legal right or limiting legal freedom of action is a detriment.  Hamer v. Sidway
b)	Bargained-for-exchange Test: Consideration requires a contractual promise to be the product of intentional, reciprocal bargaining or negotiation.  Voluntary assumption of an obligation upon condition of an act or forbearance by other.  Court finds no such bargaining or assumption of obligation in Baehr v. Penn-O-Tex Oil Corp.- Court finds that  didn’t sue because of inconvenience, didn’t forebear from suit as a result of negotiations over the phone with representative.  No intentional bargainingno considerationno K.
2.	Court will not judge the adequacy or value of consideration.  Batsakis v. Demotsis , § 79
Caveat: Cannot bargain for illegal stuff, cannot use fraud or duress
3.	Past performanceNot consideration.  Consideration is given in exchange for promise, cannot be given before promise.  If it is, not related to promise and is not legal consideration.  Plowman v. Indian Refining Co. 
4.	Certain acts=Conditions to promise, not consideration.  Test: If condition benefits promisorConsideration.  Plowman
5.	Moral obligations are not enforceable.  Plowman
C.	Damages-Remedies for breach of K-
1.	Specific Performance
2.	Damages in the amount of loss of contract- Benefit of the Bargain/Expectation Damages

II.  Obligation in the Absence of Exchange
A.	Restitution: Liability for Benefits Received
 Major modification of classical contract law
Classical: Glenn v. Savage- no liability if no performance was requested and no promise was made to pay afterwards.  No such thing as restitution, if there had been a promise Court may have worked backwards to try and find K .  May be a greater right of recovery if Glenn were a professional rescuer.
 No K exists-try and impose contractual obligation.  There is performance and consideration but no offer and acceptance
 One who has been unjustly enriched is required to make restitution to other party
1.	In the absence of a promise
a)  Preservation of life- § 116- Person who supplies things or services to another, although acting without the other’s knowledge or , is entitled to restitution if
(a)	acted unofficiously with intent to charge
(b)	things/services necessary to prevent suffering or pain
(c)	no reason to know or believe consent would not be given if possible
(d)	impossible for party to consent

         b)  Preservation of another’s things or credit § 117- Person who preserves things without 
         knowledge or consent is entitled to restitution if
(a)	in lawful possession of things  and preservation was not made necessary by breach of duty to other
(b)	it was reasonably necessary that services be rendered before it was possible to communicate with owner
(c)	no reason to believe owner did not desire acts or services
(d)	intent to charge for services or retain things as his own if owner not discovered or does not claim
(e)	things have been accepted by owner
Defense: Acted gratuitously
In re Estate of Crisan
-	promise implied when danger to health-law implies obligations
-	public hospital is not under a duty to provide free care if patient is able to pay
-	in order to sort out gratuitous acts- Opportunity Cost Theory-If not rendering these services, would be rendering same services to someone who would pay.  This works well with professionals or one who possesses professional skills

c)  Unjust Enrichment Watts v. Watts
(a)	a benefit conferred on  by  
(b)	appreciation or knowledge of benefit by 
(c)	acceptance and retention of benefit under circumstances making it inequitable for  to retain the benefit
Watts v. Watts
-	’s claims
1.	Statutory right-Denied
2.	Estoppel claim-Engage in certain conduct you are estopped from asserting otherwise-Denied
3.	Breach of Contract-Court feels there could be K but it should be legislative change-Denied
4.	Restitutionary claim- Granted
           Restitution not applicable to subcontractors against contractors.  
Flooring Systems Inc. v. Radisson Group
          
2.	Promissory Restitution (§ 86)
a)	Definition: Promise to give restitution made after the performance
b)	Classical doctrine: Performance is past consideration for the promiseno K no remedy                          Mills v. Wyman     
c)	Material Benefit Rule-If a person receives a material benefit from another, other than gratuitously, a subsequent promise to compensate if enforceable.  Webb v. McGowin- K is reverse order
-	life and limb shown to have pecuniary value Webb v. McGowin 
Differences between Mills and Webb:
 Benefit to promisor, not 3rd party
 Ratification of promise-after the fact approval, promise is recommunicated
 Elapsed time with ratification- promise not made in the heat of the moment
 Payments made-indication of voluntary assumption of obligation 
d)	§ 86- Promise made for benefit previously received is binding to the extent necessary to prevent injustice
Exceptions: Not binding if conferred as a gift, if promisor not unjustly enriched, and to extent that its value is disproportionate to the benefit

B.	Promissory Estoppel: Protection for Unbargained-for Reliance 
(Reliance based theory-exists when requirements for an enforceable contract haven’t been met
1.	§ 90 (a) a promise which promisor should reasonably expect to induce action or forbearance by promisee or 3rd party and (b) which does induce such action is binding if (c) injustice can be avoided only by enforcement of the promise.
2.	Based on notion of equityremedy may be limited as justice requires
3.	Serves as substitute or exception to consideration
4.	Promises within the family are generally not governed by quid pro quo and restitutionary measures  
       Kirksey v. Kirksey
5.	Allegheny College v. National Chautauqua County Bank 
-  No consideration to support K
-  No detrimental reliance for promissory estoppel
- Combines and finds that acceptance of duty is detrimental reliance for purpose of promissory estoppel
- absent anything more fulfillment of condition of gift does not create an obligationno considerationno K
- used promissory estoppel to create duty
- if these promises were not enforceable it would be very difficult for charities to function
- Under § 90 Charitable Subscriptions are binding without proof that promise induced action or forebearance

6.	Katz v. Danny Dare
- Broad Test for Promissory Estoppel
a)	promise
b)	promisor reasonably expects promisee to rely on promise
c)	detrimental reliance on the promise (Can be shown by expenditures but this is not the only way)
d)	injustice can avoided only by enforcement of the promise
-	detrimental reliance works for promises, is not the test for consideration-must be a legal detriment for consideration
-	** Extended application of promissory estoppel into commercial setting
Differences between Plowman and Katz v. Danny Dare:
 Agency issue-clearer power of agency in Katz
 Negotiations- Katz -Prolonged negotiations with voluntary participation on both sides
7.	Universal Computer Systems, Inc. v. Medical Services
-      Agency issue
-	Issue of whether federal statutes give constructive notice so that it was unreasonable to rely on the promise
-	Flexible remedies because of justice concerns-awarded bargain of the benefit damages because it was found that they would have got the K if they had not relied on agent
C.	Damages
1.	Restitutionary Damages-to extent of the benefits received so that there is no unjust enrichment-may be Benefit of Benefit Conferred or Value of Services
2.	Reliance Damages-usually for promissory estoppel-Out of Pocket Expenses or damages incurred by relying on the promise.  Value of detrimental reliance determined by the court

III. Obligation in the Absence of Complete Agreement-gradual movement toward a lower, less 
                                                                                                  predictable threshold of liability
A.	Limiting the Offeror’s Power to Revoke
1.	Classical contract doctrine: offer can be made irrevocable by K-An option K § 87 –separate consideration is needed for option K
2.	Promissory Estoppel: The effect of pre-acceptance reliance-Offeree expends resources or substantially changes position in belief that offer will remain open for acceptance
a)	Analogous to unilateral K and § 45- part performance limits offeror’s power to revoke
James Baird Co. v. Gimbel Bros., Inc.
-	revocation occurred before acceptance no K
-	if there was acceptanceK, unilateral mistake by Gimbel would not prevent them from being bound by terms
-	Use by a general contractor of sub’s bid does not constitute acceptance of bid- no bi-K or uni-K
-	Court does not want to use PE in commercial setting-distinguishes between promises and offers
-	A promise is considered less than an offer.  Where there’s an offer, there’s usually a promise
-	PE would create non-mutual obligation- Sub would be bound but not general
Drennan v. Star Paving Co.- Sub tried to revoke bid after General was awarded the K
-	used uniK analogy and § 45- hold open offer once performance has begun, use of sub’s bid in bid is part  
performance offer can no longer be revoked
-	bid itself contains an implied promise to hold offer open until K is awarded
-	reliance is not acceptance (not bound to bid if not awarded K) no K
-	reliance is enough to create enforceable promise to hold offer open- estopped from revoking
b)	Elements to use promissory estoppel to enforce an offer: Drennan v. Star Paving Co. Uses § 90 to make a promise binding even without consideration
(1)	Promise/implied promise which induces reliance (Subsidiary promise not to revoke)
(2)	Reasonable reliance on this promise
(3)	Injustice can be avoided only by enforcement of promise (Costs incurred by reliance)
c)	Limits to Promissory Estoppel:
 if general shops around after getting K and reopens negotiationsObligation of original bid evaporates
   No injustice.  Naming statutes-force general to use sub named in bid
 Sub made bona fide mistake and general knew or should have known.  
  No reasonable reliance. 	
 Sub puts revocation in language of bid-no PE.  
   No implied promiseNo reasonable reliance.
 Mere estimates are not a firm bid.  No offer No promise which induces reliance.
No PE protects sub, PE protects general, but also protects client

3.	Irrevocability by Statute: the “Firm Offer”
                Merchant: Person who deals in goods of the kind or by occupation holds self out as having    
                                   knowledge or skill peculiar to the practices or goods involved, or person to
                                   whom such knowledge or skill may be attributed by employment of someone  
                       who by occupation holds self out as having knowledge or skill.
                Goods:       All things movable at the time of K, not money, not investment securities
a)	UCC § 2-205- An offer is FIRM, irrevocable if
(1)	Offer by merchant for goods
(2)	Written and signed assurance (signed separate from K for protection against inadvertent signing) that offer will be held open
(3)	No consideration-Fundamental shift from common-law that an offer can be irrevocable w/o 
(4)	Maximum of 3 months
b)   NEW YORK STATUTE § 5-1109- Extends firm offer status to 
(1)	offers NOT involving GOODS or MERCHANTS
(2)	permits offer to extend in duration past 3 months
(3)	MUST EXPLICITLY STATE THAT IT IS IRREVOCABLE for a given period of time, or will be understood as a reasonable amount of time
c)   Damages- K type remedy, considerably greater than with PE
Mid-South Packers, Inc. v. Shoney’s, Inc.
-	 claimed requirements K-denied because there was no promise of exclusivityno considerationno K
-	Court found a firm offer which held for 3 mos.
-	Replaced by new offer with new prices and purchase orders of  were new acceptance each timeseries of Ks 
-	Effect of noting old price on new acceptance LEGAL NOTHING

B.	Qualified Acceptance: The “Battle of the Forms”-Forms speed up, costs down, standardize, clarify
1.	“LAST SHOT” Rule: Classical doctrine holds that the last form sent is the offer/counter-offer if there are different terms (“Mirror-image” Rule) and performance is the acceptanceK with terms of the last form, the offer, governing.  
Poel v. Brunswick-Balke-Collender Co.
-	Under common law as long as language adds or changes it is a counter-offer-BOILERPLATE COUNTS
-	No performance, no acceptance of counter offerno K ever existed
2.	UCC § 2-207
(a)
(1)	A form with additional or different terms can still act as acceptance UNLESS acceptance is expressly made conditional on assent to new terms
(2)	Additional terms become part of contract between merchants UNLESS
(a)	offer expressly limits acceptance to terms of the offer
(b)	terms materially alter K
(c)	notification of objection to terms already given or given in reasonable time after notice received
(3)	If conduct establishes K, terms are those agreed upon by parties and supplementary 
      gap fillers UCC

(b)	Result of § 2-207 “FIRST SHOT” Rule: Once court finds Acceptance it governs- unless new terms of acceptance fall under (2)(a),(b),(c) additional terms became part of K, first form to be acceptance wins
Brown Machine , Inc. v. Hercules, Inc.
- KNOCK OUT Rule: Opposite terms, or terms which will not constitute any sort of gapfiller are out
- Indemnification clause-knocked out
                             What point was offer made
                             Not conditional acceptance new terms part of K
                             Conditional acceptance must decide if new terms were accepted
	               If can’t find K 2 alternatives  
(1)	§ 2-207 (3)- Terms are anything agreed upon and gap filler; anything disagreed upon is out
(2)	LAST SHOT Rule-Performance=Acceptance; Last Form=Offer, those terms govern
UCC doesn’t want this
(c)	Material Alteration Test: § 2-207 Cmt. 4: SURPRISE OR HARDSHIP
Dale R. Horning Co. v. Falconer Glass
-	DISJUNCTIVE TEST- Surprise OR Hardship
(1)	Surprise: trade usage and industry standards important to determine surprise element
(2)	Hardship: Limitation of damage remedies-there will always be hardship in these cases
  Is a disjunctive test really appropriate? 
 get rid of boilerplate language
   
C.	Postponed Bargaining: The “Agreement to Agree” 
Renewal terms: - reduce transaction costs
                          - limit uncertainty
                          - reduce risk of new contracts
1.	Common-law analysis- does not recognize Ks which include terms to be agreed upon later
Walker v. Keith
               -renewal clause in lease with no rent AND no mechanism for determining rent
     - Court holds that rent is a material term which was no agreed uponno K 
     - does not want to invent and enforce a term which the parties themselves couldn’t agree on
     - if there was a definite, objective formula, Court would have used itenforceable option
     - Void for vagueness. Terms must be certain § 33
        Other courts have rejected this approach and enforced renewal options WHEN:
          Unequal bargaining power enforce when it is to the benefit of the weaker party
          Parties intended something.  
            - Presumption that people don’t enter Ks with intent of not being bound
          Lessee shouldn’t be deprived of right to enforce K. Renewal clause was negotiated for
           and has value.  If no enforcement, we write it out of the K

2.	UCC §2-305 Open Price Term
- takes into account what parties intended to do
- unenforceable when courts feel the openness of the term indicates intent not to be bound
- fills in reasonableness at time of delivery for open price
3.	Contracts with open terms
UCC §2-204 - governs general formulation of contracts
                      - guiding principle in deciding whether K is formed
                      - Open terms, K still enforceable IF 
                         intent to form a contract AND 
                         a reasonably certain basis for giving an appropriate remedy
                        - trade usage may govern appropriate remedies §1-205
Pennsylvania Co. v. Wilmington Trust Co.
- can use UCC by analogy-even though it excludes securities, Court uses it here
- there is a question as to whether the parties intended to be bound
   Factors to help determine intent: §27
    express agreement, extent of agreement on terms
    is it a type usually put in writing
    whether formal writing is needed
    is there a standard form
    amount of $ involved in the deal
    details involved
    type of contract-common or unusual
    is there action taken in preparation of performance
- “agreement to agree”, no signed formal K
- Agreement must be sufficient so that Ct. doesn’t have to determine a material element
                  for contract to hold
                   Material Terms:
                    terms of purchase agreement
                    where and when deal is to take place
                    Board approval, ICC approval
                    determination of how to run company
                   contract does not fail just because of missing terms-summary judgment for  and  fail
4.	Letters of Intent- agreements in principle
-attempt to lock other party in without being bound yourself
-costs less than going to full agreement
-Letters of intent have been held to be binding EVEN with an express statement not to be bound NOT REALLY USED ANYMORE (too risky)
Texaco v. Penzoil
- if a detailed letter of intent were used could avoid some risk but would lose cost benefit 

IV.   Statute of Frauds  § 110, 131-139
                                                       UCC §2-201
    A.  Generally
1.	Intent to protect against fraud; also works as a bar to meritorious claims without writings
2.	Classes of Contracts § 110
a)	Executor/administrator to answer for a duty to decedent
b)	K to answer for duty to another
c)	K made upon consideration of marriage
d)	Sale of an interest in land
e)	K not to be performed within 1 year 
3.	Classes of Contracts Now Governed by § 2-201
a)	Sale of goods for a price of $500 or more
b)	Sale of securities
c)	Sale of personal property not otherwise covered, to extent of enforcement beyond $5000
4.	Signed writing requirement § 110
Must be signature of party against whom enforcement is sought
Signed: any form of authentication §134
                 Writing: -Writing for any purpose
                                - Several writings can be combined § 132
                  NY requires writings to refer to same transaction and must on their face establish K
 
B.	Application of Common Law Statute of Frauds
       Does the statute of frauds apply to this contract?
       Has the statute been satisfied? (Signed writing)
       If not, are there any exceptions to get out of the statute?
         Partial performance- Winternitz
        Reliance- McIntosh
1.	Reluctance to circumvent statute loosening of requirements
Crabtree v. Elizabeth Arden (NY)
- employment  contract
- statute applies: can’t be performed in 1 year
- loosen requirements to establish a signed writing
- permits signed and unsigned writings to be read together (referring to same subject)
- could have tried to use memo with secretary’s signature authorized agent signing
LESSON: Discovery is very important

2.	Reluctance to allow complete avoidance of statute Alternate claim for recovery
Winternitz v. Summit Hills
- K for sale contingent on lease
- Court finds an oral Kenforceable because K is covered by statute of frauds
- Part performance exception for land contracts §129-requires equitable relief
- This exception is only used where $ damages are deemed inadequate 
(Historically, if you’re looking for $ suspicious if you really relied on getting the property)
-  is seeking $ part performance exception is unavailable
- Court uses tort remedy –malicious interference with K- to give  recovery
- 2 perspectives on the case:
    unduly conservative on statute of frauds
    unduly aggressive on intentional interference with contract claim
LESSON: don’t say anything (’s malicious statements got him in trouble)

3.	Hostile to Statute of FraudsAlternate Theory: Promissory Estoppel
McIntosh v. Murphy
-  moves to Hawaii, relying on contract with ,  denies K, no writing 
- trial court counts actual days to avoid statute of frauds
- App. Ct. uses promissory estoppel exception § 139 to provide remedy
- § 139 is broader than § 129-not limited to land 
- reliance based theory, remedy limited as justice requires
- can only be used if injustice can be avoided ONLY by the enforcement of the promise
 Must consider the availability and adequacy of other remedies
- this eliminates statute as a bar to enforcement
- any definite and substantial performance enforces entire K
****WHY NOT JUST OUT-OF-POCKET
LESSON: Put all employment policies in writing

C.	UCC Statute of Frauds § 2-201-No merchant requirement CHECK THIS
- drafters had option of eliminating statute but didn’t, modified instead
(1)	Writing not insufficient because it omits or incorrectly states a term agreed upon, K is not enforceable beyond quantity of goods shown in such a writing
(2)	Between merchants, if confirmatiin writing is received within a reasonable period of time and receiver knows its contents it satisisfies (1) UNLESS written notice of objection is given within 10 days
(3)	EXCEPTIONS: a contract not in writing is still valid IF
(a)	Specially manufactured goods for buyer and are not suitable for sale to others
Rationale: Special nature of goods are evidence of contract
                  Substantial beginning of performance-evidences contract, can enforce w/o writing
         Prototype rejected as this type of performance. Chambers Steel Engraving v. Tambrands
          ALL OR NOTHING
(b)	party against whom enforcement is sought admits a contract for sale was made
(c)	payment for goods has been made and accepted or goods have been received and accepted
Cohn v. Fisher
- K to buy a boat
-  gave a check for boat
- Said he would not complete deal because buying meant inspection first
-  resold boat for a lower price, now seeks difference in price
-  argues “usage of trade”  §1-205

V.  Principles of Interpretation
       Subjective School of Thought: Mutual mistake Raffles v. Wichelhaus “The Peerless Case”
         -each meant something different than otherno contract
         Policy considerations: Freedom of choice, no imposition of external standards
         Makes it hard to enforce agreements
       Objective School of Thought: Objective interpretation of words, reasonable person’s
                                                         understanding, intent of parties irrelevant
          Cohn v. Fisher- didn’t mean to buy without inspectiondoesn’t matter still a contract
          Policy considerations: Notions of fairness and efficiency
          Can yield absurd results
        Modified Objectivist: §201-204 Reasonable meanings will govern BUT evidence of parties
                                                              intention can overrule objective meanings.
         Joyner v. Adams
         - different interpretations of meaning of “complete development”
         -  bears burden of proof because  is seeking action and there is a bias in favor of status quo
         - Court looks at maxims of interpretation
         - If there is no meeting of the minds, 2 alternatives:
1)	No contract § 201(3)
2)	Try to figure some way to figure out which meaning will govern
         MAXIMS OF INTERPRETATION:
1.	Words of a feather flock together. Meaning of a word in a series is affected by others in the same series, word affected by its immediate context.
2.	A general term joined with a specific one will include only things that are of the same genus as the specific one. (Cattle, hogs, and other animals-doesn’t include pets)
3.	If specific items are listed without any more general or inclusive terms, other similar items are excluded.
4.	Interpretation that makes contract valid, if preferred over one that makes contract invalid
5.	Ambiguity should be resolved against the drafter
Court rejects because unsure if drafter had bargaining power, knowledge of other’s intent…
This maxim assumes a great deal of force with form contracts
6.	Interpret contract as a whole.  
7.	The principal apparent purpose of the parties is given great weight.  If obscure, can fall back on “plain meaning”.
8.	Plain meaning-clear on its face, dictionary meanings.
9.	Specific provision is exception to general one.  If 2 provisions are inconsistent and if one is general enough to include specific, the specific provision will state an exception.
10.	Handwritten or types provisions control over printed provisions.
11.	Public interest preferred
12.	Reasonable construction-thing that makes sense
 Frigaliment Importing Co. v. B.N.S. International Sales Corp. (NY)
         - The meaning of “chicken”
         -  has failed to sustain burden of proof that his meaning should govern
         -  wins because  loses
         - Even if a contract had not been found, there was still performance which would evidence K
         - Evidence used:
            language of contract- words of a feather rule Court rejects
            trade usage-expert witnesses ambiguous
              NY HIGH BAR ON ESTABLISHING COMMON USAGE
              UCC- if you are a new entrant to trade , it is your obligation to find out meanings
            performance-acceptance of birds accepted meaning 
              NO- only if you accept without objection § 202(4)
            regulatory/legal standards-it’s referred to in contract Court accepts, it’s easy and reliable
            Reasonable construction-price is too low to mean non-fowl chicken, would be taking a loss
Morin Building Products Co. v. Baystore Construction, Inc.
-	judge rejects explicit language of a subjective standard for satisfaction clause because it was not formulated specifically for the contract in dispute
-	raises questions about standard forms
-	if you’re a big company you lose
C & J Fertilizer Inc. v. Allied Mutual Insurance Co.
-	uses “Doctrine of Reasonable Expectations” to get  coverage for burglary
-	could’ve used evidence of parties intent, ambiguity of termsread against drafter
“Doctrine of Reasonable Expectations”
-	not widely used. Only for insurance contracts. Applied only when:
a)	Adhesion contract
(1)	standard forms
(2)	unequal bargaining power between parties
(3)	no real choice, no negotiable terms, TAKE IT OR LEAVE IT
b)	Where non-dickered terms frustrate reasonable expectations
TEST:
 term is bizarre or oppressive              eliminates dominant purpose of transaction     
 eviscerates non-standard terms agreed upon