Ii no consensus ad idem no meeting of the minds this

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Chapter 9 / Exercise 125
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ii) “no consensus ad idem”— no meeting of the minds (this is a subjective theory; both parties must be thinking the same thing! The court adopts the “subjective theory.” There is some debate about whether this case really is based on a subjective theory; it would have turned out the same way on an objective theory as well! Since there are two ships named “Peerless,” one party’s interpretation of “Peerless” is just as reasonable or unreasonable as the other—i.e., no K because of ambiguity ! 2) Frigaliment Importing Co. v. B.N.S. International Sales Corp. : “What is a chicken?” Δ agreed in two contracts to sell Π “chicken.” But when the chicken arrived, Π found that the heavier chicken it had ordered were not the young broiling and frying chicken it thought it’d be, but stewing, “fowl” chicken. Nevertheless, the shipment under the second contract was made, with the heavier chickens being “stewing” birds. Δ stopped the transaction in Rotterdam. Swiss buyer sued N.Y. seller for breach of warranty. Π’s argument: 40
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Chapter 9 / Exercise 125
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41 i) There is no such thing as a 1½ lb. “stewing” chicken, so the larger weight birds “must likewise be young.” (Judge says this is “unpersuasive.”) ii) Trade usage of term “chicken” means “young chicken.” Δ’s defense: i) K itself refers to grade A government standards “chicken” and the Agricultural Department defines the word broadly. ii) At the prices the seller was selling the chickens, they could not have been young chickens (or they would have sustained a loss)! iii) They were new to the business, so they didn’t know the industry usage of the term. Judge says Π did not carry its burden of proof showing that “chicken” was used in the narrow, rather than broad, sense. U.C.C. §1-205. Course of Dealing and Usage of Trade: (1) Course of dealing = a sequence of previous conduct between the parties—prior dealings (other Ks between the same two parties); (2) Usage of trade = understanding in the industry (not exclusive to the parties); (3) Course of performance = prior performance of that particular K (within one K); (4) Express terms of K = the terms of the contract. U.C.C. §2-208 (2). Course of Performance or Practical Construction and U.C.C. § 1-205(4) (essentially define the hierarchy of §1-205): (1) express terms control everything else; (2) course of performance controls course of dealings and usage of trade; (3) course of dealings; and (4) usage of trade. Δ’s subjective intent would not be significant if this did not coincide with an objective meaning of “chicken.” Burden here is on the P (party seeking to prove breach) to prove that the term was not vague and that the other party knew what they want. What if seller objectively believed that this was a K for “young chicken,” but nonetheless sold “stewing chickens”? Courts won’t use an objective meaning if both parties’ subjective interpretation is consistent (see §201(1)).

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