(b) A second group will determine the impact of course of dealing and usage of trade on the interpretation of contract terms.
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Mountain Stream Trout Company agreed to buy “market size” trout from trout grower Lake Farms, LLC. Their five-year contract did not define market size. At the time, in the trade, market size referred to fish of one-pound live weight. After three years, Mountain Stream began taking fewer, smaller deliveries of larger fish, claiming that market size varied according to whatever its customers demanded and that its customers now demanded larger fish. Lake Farms filed a suit for breach of contract. (See The Formation of Sales and Lease Contracts.) Parol Evidence. Parol Evidence.
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Mountain Stream Trout Company agreed to buy "market size" trout from trout grower Lake Farms, LLC. Their five-year contract did not define market size. At the time, in the trade, market size referred to fish of one-pound live weight. After three years, Mountain Stream began taking fewer, smaller deliveries of larger fish, claiming that market size varied according to whatever its customers demanded and that its customers now demanded larger fish. Lake Farms filed a suit for breach of contract. (See The Formation of Sales and Lease Contracts.)
(a) The first group will decide whether parol evidence is admissible to explain the terms of this contract. Are there any exceptions that could apply?
Explanation
The exception to parol rule of evidence that ma apply in this case is trade use or custom. Parol evidence rule can not be used to exclude extrinsic terms implied through trade usage or custom.Where the language used in the contract has a particular meaning, for example, by custom or usage in a particular trade, industry or region, evidence of that meaning is admissible. This exception to the rule was confirmed in the case of Hutton v Warren(1836)
References
Commission, G. B. (1986). Law of contract: The parol evidence rule.
Corbin, A. L. (1964). Interpretation of Words and the Parol Evidence Rule. Cornell LQ, 50, 161.
McMeel, G. (2007). The construction of contracts: Interpretation, implication, and rectification. Oxford University Press, USA.
Answer
Parol rule of evidence admissible to explain the terms of this contract.
This rule of contractual construction prohibits parties in litigation from introducing extrinsic evidence of prior or contemporaneous agreements,negotiations or representation to modify,supplement or contradict a written contract.The rule can be used to explain the meaning of the term "market size "at the time of making the contract.The meaning of that term during the drafting of the contract can not be amended,modified or contradicted from what existed while the parties were signing the contract.This will help preserve the original terms of the contract from modification and thus preserve the ingenuity and integrity of the written contract.This excludes extrinsic terms only where the document was agreed by both parties that the document was agreed to be a complete record of the entire contract and all prior oral or written agreements mere in the writing.
Under the parol rule of contractual construction,the term "market size" will remain to mean the same thing it meant at the time of entering into the contract.
Parol Evidence.
Mountain Stream Trout Company agreed to buy "market size" trout from trout grower Lake Farms, LLC. Their five-year contract did not define market size. At the time, in the trade, market size referred to fish of one-pound live weight. After three years, Mountain Stream began taking fewer, smaller deliveries of larger fish, claiming that market size varied according to whatever its customers demanded and that its customers now demanded larger fish. Lake Farms filed a suit for breach of contract. (See The Formation of Sales and Lease Contracts.)
(b) A second group will determine the impact of course of dealing and usage of trade on the interpretation of contract terms.
Explanation
In this case the impact of course of dealing and usage of trade on the interpretation of contract terms is that it is not necessary to document all the terms of contract and some contract can be formed with the actions of the parties.
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Answer
Mountain Stream Trout Company agreed to buy "market size" trout from trout grower Lake Farms, LLC. Mountain stream trout did not define what will be market size and accepted the trout After three years, Mountain Stream began taking fewer, smaller deliveries of larger fish, claiming that market size varied according to whatever its customers demanded and that its customers now demanded larger fish.Lake farm filed a suit for breach of contract.
Parol Evidence.
Mountain Stream Trout Company agreed to buy "market size" trout from trout grower Lake Farms, LLC. Their five-year contract did not define market size. At the time, in the trade, market size referred to fish of one-pound live weight. After three years, Mountain Stream began taking fewer, smaller deliveries of larger fish, claiming that market size varied according to whatever its customers demanded and that its customers now demanded larger fish. Lake Farms filed a suit for breach of contract. (See The Formation of Sales and Lease Contracts.)
(c) A third group will discuss how parties to a commercial contract can avoid the possibility that a court will interpret the contract terms in accordance with trade usage.
Explanation
In this case,the parties to the contract would have avoid the possibility that court will interpret the contract terms in accordance with trade usage by documenting all terms of contract.
Answer
Mountain Stream Trout Company agreed to buy "market size" trout from trout grower Lake Farms, LLC. Mountain stream trout did not define what will be market size and accepted the trout After three years, Mountain Stream began taking fewer, smaller deliveries of larger fish, claiming that market size varied according to whatever its customers demanded and that its customers now demanded larger fish.Lake farm filed a suit for breach of contract.
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