Most breach of contracts cases are primarily controlled by the contract at the center of the issue. Courts try to resolve as much as possible by looking at the terms of the contract. Additional information is only allowed when the contract is unclear or if there is a possibility of fraud or a misrepresentation. When deciding whether a contract has ambiguous or unclear terms, it is not enough for one party to claim confusion. The judge reviews the contract for himself or herself and if the language used for the contract makes sense and has a precise meaning, the contract should be considered unambiguous.
Take the case of Wells Fargo. US Airways sold Wells Fargo three planes in three separate transactions. These specific planes had a maximum take off weight of 124,500 pounds. This weight was increased through a special agreement between Boeing, the manufacturer of the planes, and US Airways and only applied to US Airways. Wells Fargo was never told of this agreement. At the same time, Wells Fargo created a lease agreement with US Airways for the same planes. Under this lease agreement, among other things, the planes were to return to Wells Fargo at the same weight as when they were delivered to US Airways.
Wells Fargo is suing for breach of contract because US Airways returned a plane at an incorrect, lower weight. The case focuses on the definition of delivery. US Airways claims that it did not breach the contract because it believes the term delivery has two meanings under the contract. US Airways claims that when the term is capitalized, it refers to the delivery of the planes from Wells Fargo to US Airways. When the term is not capitalized, US Airways claims that delivery refers to the delivery of the planes from Boeing to US Airways as the initial purchaser. When US Airways first purchased the planes, weight was 124,500, then there was a secondary agreement increasing the maximum weight. US Airways believes that because the term delivery is lowercase in the section regarding returns, delivery refers to its original contract with Boeing.
The court disagreed with US Airways and found in favor of Wells Fargo on the breach of contract issue. The court found that there was no reason to think that the contract referenced the original delivery terms with Boeing. When reviewing the contract, all terms clearly applied to Wells Fargo and US Airways. The court found that the contract did not reasonably lend itself to multiple interpretations. Therefore, the definition of delivery was found to be consistent throughout the contract.
Knowing your responsibilities under a contract is key to performing your duties well. If you are confused about the terms of your contract or agreement, a lawyer can help by reviewing the terms with you. An attorney can help you understand your rights and options under a contract before or after you sign it. If you have any contract questions, consider calling our Long Island business lawyer for assistance.
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