American Contract Law for a Global Age, 2017a

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Absent strong public policy considerations, Louisiana allows parties to stipulate in their contracts which state’s law are to govern them. In the instant case, section 13 of the contract in question specifies that Texas law will govern the interpretation of the contract. No showing has been made that applying Texas law would violate any strong public policy considerations. Accordingly, Texas law controls PPG’s breach of contract claim. Under Texas law, interpretation of an unambiguous contract is a question of law. A determination of ambiguity is reserved to the Court. The contract between PPG and Shell contained an “excuses for nonperformance” clause. Section 8 of the contract reads: EXCUSES FOR NONPERFORMANCE Either Seller or Buyer will be excused from the obligations of this Contract to the extent that performance is delayed or prevented by any circumstances (except financial) reasonably beyond its control or by fire, explosion, mechanical breakdown, strikes or other labor trouble, plant shutdown, unavailability of raw materials or unavailability of or interference with the usual means of transporting the Product or compliance with any law, regulation, order, recommendation, or request of any governmental authority. (Emphasis added.) PPG maintains that the phrase “reasonably beyond its control” qualifies the rest of the contract clause, making the exculpation of Shell dependent upon whether the explosion was reasonably beyond its control. However, under the law of Texas, contract language should be given its “plain grammatical meaning.” Simply stated, “or” is disjunctive, or alternative in its effect. Lyons v. Montgomery, 701 S.W.2d 641, 643 (Tex. 1985). In other words, “or” means or, not “and.” However, PPG argues that the Court is required to determine whether reading “or” as disjunctive would defeat the intentions of the parties, and whether the context requires the Court to determine if a conjunctive meaning is more appropriate. PPG misconstrues Texas law. These inquiries are necessary only if the Court were to determine as a matter of law that the contract language is ambiguous. See Board of Insurance Comm’rs v. Guardian Life Ins. Co., 180 S.W.2d 906 (Tex. 1944). If that were the case, only then would the Court use the two-step inquiry suggested by PPG in order to determine whether there was a genuine issue of material fact with respect to the parties intentions, and whether any compelling reasons existed for using the conjunctive “or.” However, as noted previously, this Court finds that there is no genuine issue of material fact regarding the plain language of the contract. As a matter of law the contract is unambiguous. “Or” is disjunctive and, therefore, Shell is exculpated under Section 8 of the contract, because of the explosion, regardless of whether the explosion was “reasonably beyond its control.” See Eastern Airlines, Inc. v. McDonnell Douglas Corp., 532 F.2d 957, 992 (5th Cir. 1976). This is not an absurd result, as suggested by PPG, because commercially it would make no sense for Shell to intentionally blow up ______________________________________________________________________________ 366 CHAPTER VI: TERMS AND INTERPRETATION
its own refinery in order to avoid delivering ethylene to PPG. Indeed, it would not make commercial sense for Shell to intentionally bring about any of the contingencies enumerated in Section 8 of the contract. As noted previously, PPG contends that the term “reasonably beyond its control” modifies the enumerated events which follow “or” in Section 8 of the contract. This interpretation is not in keeping with the plain grammatical meaning of the disjunctive. However, there are cases in this circuit which apply a conjunctive meaning to such a clause. Although, [in these cases,] it is important to note, the “reasonably beyond its control” language follows and clearly modifies by reference the enumerated contingencies. In Jon-T Chemicals, Inc. v. Freeport Chemical Co., 704 F.2d 1412, 1414 (5th Cir. 1983), the excuse clause read in pertinent part: Seller shall not be liable for any failure or delay in performance hereunder which may be due, in whole or in part, to fire, explosion, earthquake, storm, flood, drought . . . or any contingency or delay or failure or cause of any nature beyond the reasonable control of Seller, whether or not of the kind hereinabove specified. . . . In Nissho-Iwai Co., Ltd. v. Occidental Crude Sales, 729 F.2d 1530 (5th Cir. 1984), the “force majeure” clause excused nonperformance caused by: executive or administrative orders or acts [of the Libyan Government], . . . or by breakdown or injury to . . . producing . . . or delivering facilities, . . . or by any other event, whether or not similar to the causes specified above . . . , which shall not reasonably be within the control of the party against whom the claim would otherwise be made . . . . In these two cases, the reasonable control language and the enumerated events are plainly and grammatically tied together. However, in Section 8 of the Shell-PPG contract these same two portions are not tied together conjunctively, and should not now be read that way. The language is clear and unambiguous. There is no genuine issue of material fact regarding the wording of the contract, particularly Section 8 of the contract. Therefore, Shell is entitled to a judgment as a matter of law. _____________________ Review Question 4. The PPG Industries court puts a great deal of emphasis on grammar. Note the clause at issue in this case and compare it to the two clauses quoted from the earlier Jon-T Chemicals and Nissho-Iwai decisions. Can you describe exactly why the court found the differences in the particular language to be compelling? Review Question 5. What is a force majeure clause and what does it do? That, incidentally, is the sort of thing lawyers in all types of practice are expected to understand as part of their general knowledge. _____________________ ______________________________________________________________________________ UNIT 18: THE INTERPRETIVE TOOLBOX 367
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Notices This is the first edition o
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About CALI eLangdell Press The Cent
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Unit 19: Conditions ...............
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hired Corleone family thugs 4 or an
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described herein, and agrees to fre
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6. MARY BETH WHITEHEAD, Surrogate,
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Surrogate and WILLIAM STERN, Natura
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10. Consider paragraph 5. Should th
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The two court opinions that follow
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Venue Venue is a concept of place
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Their first child, Ryan, was born o
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Subsequent to entering into the sur
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The sixth and final argument sugges
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It is argued by amicus that the $ 1
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no stated public policy on surrogac
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IN RE BABY M Supreme Court of New J
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adoption; the sole purpose of the c
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The surrogacy contract violates the
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Problems Donald Donor is a single,
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An Introduction to CONTRACT FORMATI
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particular obligation? In Europe, i
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The evidence is undisputed that pla
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After some negotiation a price of $
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The answer of A.H. Zehmer admitted
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no, that is beer and liquor talking
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on the Zehmers as well as on himsel
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offer and of the reward and its sub
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your professor. You will come acros
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car title you’re holding there. I
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In the modern world, the question o
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pair of sunglasses. The drumroll th
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This letter was apparently sent onw
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Because these cases generally invol
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teenager’s schoolmates gape in ad
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Review Question 3. Note how Judge W
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cash in ten days,” it must be dee
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“Before a contract can be complet
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for the purpose of doing the work a
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accidentally being bound to unwante
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Here, we have a counter-offer. The
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parties.” Metropolitan Sports Fac
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court. See Minn. R. Civ. App. P. 10
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Thus, it clearly appears that the d
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with distribution. The parties ulti
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all essential terms. See, e.g., Sit
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Enclosed, we beg to hand you contra
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to call for an acceptance particula
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than identify himself, Dealer says,
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offer.” More often, they nod, sha
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The next attack will be my end, I a
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from all the facts and circumstance
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Notice to the agent, within the sco
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2. Written approval by United State
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contrary in the offer, the acceptan
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HOBBS v. MASSASOIT WHIP CO. Supreme
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stranger may impose a duty upon ano
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contract in this case come into exi
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An Introduction to CONSIDERATION Th
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and you are free to change your min
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Ridge Runner that she lacked the pr
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We conclude that the territory enco
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He further answered, that it was gi
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This action was brought upon an all
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consideration does in fact benefit
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Review Question 5. The promisors in
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The distinction between such a cond
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Vincent refuses. Fritz eventually s
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enefit was money received, the subs
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they stopped work in a body, and de
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supervise this building. Under the
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The day before trial the plaintiffs
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General rules of law established fo
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For the foregoing reasons we are al
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WEBB v. McGOWIN Court of Appeals of
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100 P. 631 (Kan. 1909); Edson v. Po
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McGowin’s adult child, would that
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efuses, saying, “We had a deal.
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Giles had no right to use it. But t
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BLICESTER: That’s crazy. JUDGE: N
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A. She took the piece of paper and
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According to the undisputed proof,
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We recognize that upon different fa
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was discussed with compensation to
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CONRAD v. FIELDS Court of Appeals o
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her job at Qwest and enroll in law
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Seth Wyman’s estranged son Levi i
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An Introduction to ALTERNATIVE REGI
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consistency. Some provisions have p
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TOUSLEY-BIXLER CONSTRUCTION CO. v.
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of goods within this Article whethe
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differently from other contracts? F
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nine units was delivered and paid f
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think they have struck a deal.” Q
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more sense for contract formation t
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COMMERCIAL CODE § 2-206:12 (3D ED.
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face of which appears the notation,
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Problem 10.3 On June 1, the sales d
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except for personal use. If, howeve
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[T]he plain reading of the statute
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not lubricated in any way. Without
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we also note that Best Bolt’s vic
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(c) are fit for the ordinary purpos
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This purchase order represents the
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provision would cause no “surpris
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FLENDER CORPORATION v. TIPPINS INTE
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well that the reservations each par
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The alternate approach, recognized
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(a) Is Ivy League University a “m
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and ratified a treaty called the Un
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(2) The fact that the parties have
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e. Manufacturer in Texas contracts
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an authorized distributor of Defend
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undisputed that each of these alleg
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Treaty Text Note. Read Articles 18,
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*4 (S.D. Ohio Mar. 26, 2009); see a
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perform a substantial part of his o
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shall be settled by binding arbitra
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An Introduction to CONTRACT DEFENSE
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which extended even to being able t
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Dickerson, 72 Ala. 318 (1882). In t
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loss from the transaction, includin
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this definition. Whether other area
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ORTELERE v. TEACHERS’ RETIREMENT
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medicine, this physician “judged
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The avoidance of duties under an ag
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7. What is my total service credit?
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Review Question 5. In McGovern v. C
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will pay the full listed price of $
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endeavoured to be upheld by Perjury
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Y Contracts that cannot be performe
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you think the consideration doctrin
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NICKELS, J., dissenting. I disagree
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contracts. What is the real purpose
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At the ensuing trial, defendant den
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There may be cases in which it woul
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professional. Things were really ge
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GUENTHER v. AMER-TEX CONSTRUCTION C
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(b) Subsection (a) of this section
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Problem 14.3 Van der Rohe USA, Inc.
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sold, the terms of the sale, the na
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the judgment of a vulnerable party.
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The first issue is whether the labe
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some point or on some occasion it w
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As a matter of law, based on the fa
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or, more particularly, in cases suc
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“deprived Loral of its free will.
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As to mistake, the amended complain
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In Weger v. Rocha, 32 P.2d 417 (Cal
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I had brought back the topaz, and h
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May 5, 1886, plaintiff went out to
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arren cow is substantially a differ
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prior to the sale was Buyer aware t
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Against Public Policy. In many situ
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HANKS v. POWDER RIDGE RESTAURANT CO
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interest adversely, and identified
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illogical, in these circumstances,
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Page 342 and 343: An Introduction to TERMS AND INTERP
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Page 346 and 347: contract itself. Thus written docum
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Page 354 and 355: understandings or agreements.” 3
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Page 360 and 361: Article 8 UNITED NATIONS CONVENTION
Page 362 and 363: contracts or that parol evidence re
Page 364 and 365: percent (50%) protein, as tested on
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Page 368 and 369: Cases and Materials W.W.W. ASSOCIAT
Page 370 and 371: do so because of some identified am
Page 372 and 373: The truth is that whatever virtue a
Page 376 and 377: FRIGALIMENT IMPORTING CO. v. B.N.S.
Page 378 and 379: persuasive if sustained by the reco
Page 380 and 381: and there is force in defendant’s
Page 382 and 383: RANDOM HOUSE, INC. v. ROSETTA BOOKS
Page 384 and 385: language of the grant was broad, en
Page 386 and 387: F.3d at 1095, would conclude that t
Page 388 and 389: When Hurricane Rubin strikes the lo
Page 390 and 391: the business. The contract was sile
Page 392 and 393: party argues ambiguity), the loan f
Page 394 and 395: accordance with the terms of this c
Page 396 and 397: of the advance payments, or the num
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Page 402 and 403: TOWN OF FAIRFIELD v. D’ADDARIO Su
Page 404 and 405: damages. The notice of Kant’s act
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Page 412 and 413: Review Question 2. What was Judge C
Page 414 and 415: exercising discretion under the con
Page 416 and 417: NANAKULI PAVING AND ROCK CO. v. SHE
Page 418 and 419: § 490:1-102(2)(b). The drafters of
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Plaintiff does not contest its stat
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product. The concept of “merchant
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discovery by defendant of the defec
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Unfortunately, Plumber’s work doe
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An Introduction to PERFORMANCE AND
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doctrine, so that close-enough perf
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the number of joists used in all th
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JACOB & YOUNGS, INC. v. KENT Court
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transgressor must accept the penalt
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was for requiring this kind of pipe
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The evidence is undisputed that the
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eing a new roof. We are not prepare
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This case is simple if the perfect
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yacht remained located at SIYS’ f
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happens by mere operation of law; s
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Problems Problem 21.1 Actor is a ve
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processor for the same price as the
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venue. Under Paradine v. Jane, this
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At trial, the court allowed IH’s
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In order for a supervening event to
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The court interpreted this passage
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economic circumstances sufficiently
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A cancellation order given by her o
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e entitled to judgment. They certai
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performance is excused when unfores
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caused to communications and transp
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Following the closing of the above-
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performance. 407 East 61st Garage,
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Canal, across the Mediterranean thr
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An Introduction to REMEDIES We now
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multiplication and (very rarely) di
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It was also erroneous and misleadin
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and we turn to the question of whet
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testified that the total gas, oil,
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BRANDEIS MACHINERY & SUPPLY CO., LL
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PEEVYHOUSE v. GARLAND COAL & MINING
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explanation as to why a measure of
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work; however, where the contract p
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clear and unambiguous and the parti
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pool contractor to finish the pool
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Nevertheless, the English courts he
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perform the work. As Lee failed to
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UNITED STATES ex rel. COASTAL STEEL
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emanded for those findings. When th
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the substance is that the plaintiff
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the agreement would continue on a m
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Review Question 7. Note the paralle
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product that would be fully functio
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car to the Country Music Museum for
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Restatement (Second) of Contracts s
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Harrahs brings the instant action a
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contest payment for same if constru
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This is in accord with the earlier
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Defendant’s sole defense to this
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particular. Certainly, none of the
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sustained where, from the nature of
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ut will be happy to try to help in
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the full $7,500 price of admission
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Problem 25.2 Mina is a second-year
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other types of specific performance
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imposed as the remedy for breach of
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certainty, then S&M should be compe
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There is simply no requirement in t
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“other proper circumstances” th
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fence plaintiff erected to discoura
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y no means certain, at the time of
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cannot use that method of self-help
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contract price of $533,000) that La
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teacher resigned at the beginning,
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eaching its lease with Perez by the
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An Introduction to CONTRACT NONPART
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fraud, mistake, and illegality. If
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may be the diversity of opinion els
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given him by the will for a particu
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since Lawrence v. Fox in a desire t
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workers’ compensation benefits),
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to divide a lawyer’s loyalty betw
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Review Question 9. Lawyers do many
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Problems Problem 27.1 Hank and Hild
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interested in jumping into such a b
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limitations barred the claims. She
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assigned their claim to recover the
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application to this contract as it
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A breach of contract has been defin
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moved to Arizona and had no further
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It is evident from the express lang
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contracted to assume, and the assig
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March 1 for the conveyance of Purpl
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