ProfessorMelissa A. Hale
CaseCast™ – "What you need to know"
Brief Fact Summary. Defendant B.N.S. International Sales Corp. contracted to sell chicken to Plaintiff, Frigaliment Importing Co. Defendant sent chicken complying with the weight requirements of the contract. Plaintiff argues that the chicken sent did not comply with the terms of the contract because the term “chicken” means young chicken.
Synopsis of Rule of Law. To interpret a disputed term in a contract, the court will consider (in order of importance): (1) the language of the contract, (2) the preliminary negotiations, (3) trade usage, (4) legal standard, (5) course of performance, and (6) maxims.
Issue. Does the term “chicken” in the contract mean only younger chicken?
Held. No. The term “chicken” in the contract did not mean only younger chicken.
• In determining what a term means the court will consider (in order of importance): (1) the language of the contract, (2) the preliminary negotiations, (3) trade usage, (4) legal standard, (5) course of performance, and (6) maxims.
• The smaller chickens had to be younger chickens, because older chickens do not come in that size. Because the smaller chickens had to be younger chickens, Plaintiff argues that the larger chickens also had to be young.
• Plaintiff also argues that trade usage of the term “chicken” is to indicate a young chicken. However, there was conflicting evidence as to whether “chicken” only means a young chicken in the trade.
• One maxim is that a reasonable construction is preferred over an unreasonable construction. Defendant alleges that to sell younger chicken to Plaintiff at the contract price would result in a loss to the Defendant. Because under the Plaintiff’s construction the contract would result in Defendant selling chicken at a loss, Defendant argues that Plaintiff’s definition of “chicken” is unreasonable.
• The Court holds that the because Defendant’s definition coincides with the objective meaning, one of the dictionary definitions, the Department of Agriculture’s regulations referenced in the contract, some trade usage, the realities of the market, and statements by Plaintiff’s spokesperson, Plaintiff has not met its burden of showing that the narrower definition of the term applies.
Discussion. In the present case, the court holds that Plaintiff did not meet its burden of showing that its interpretation of the term “chicken” should control when all of the factors are considered.