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K Interpretation
Prof. Merges
Contracts – 3.15.2011
Extrinsic evidence
• What is this? What does it mean?
Greenfield v Philles Records Inc.
• Procedural history
• Facts
The Ronettes
What is the cause of action?
What is the cause of action?
• Breach of K: Defendant has no right to license songs for movies (“synch rights”), and owes plaintiffs royalties on new releases of old songs
What language in the K is at issue?
“All recordings made hereunder and all records and reproductions made therefrom . . ., shall be entirely [Philles’] property . . . . Without limitation of the foregoing, [Philles] shall have the right to make phonograph records, tape recordings, or other reproductions of the performances embodied in such recordings by any method now or hereafter known . . . .”
Holding
Holding
• “Because there is no ambiguity in the terms of the Ronettes’ agreement, defendants are entitled to exercise complete ownership rights, subject to payment of applicable royalties due plaintiffs . . .”
• Extrinsic evidence; “personal notions of fairness and equity” – p. 389
WWW Assocs. v. Giancontieri
• Why is evidence inadmissible when an agreement is unambiguous on its face?
• How do you know when an agreement is unambiguous?
What was the deal in Giancontieri?
• $750,000 for 2 acre parcel
• Senior citizen home development
What was the deal in Giancontieri?
• $750,000 for 2 acre parcel
• Terms:“litigation cancellation” provision10 day cancellation provisionExtrinsic evidence: Only for plaintiff’s
benefit: defendant could not cancel
Trident Center v. Conn. Gen. Life
• History
• Facts
History
History
• Not only did Def. win, but plaintiff was sanctioned . . . .!
What language was at issue?
What language was at issue?
“[Trident] shall not have the right to prepay the principal amount hereof in whole or in part before January 1996.”
K signed 1983
Trial court
• Easy case
• No ambiguity here
9th Circuit
• Trident seeks to offer extrinsic evidence on the “true agreement of the parties” which allowed Trident to prepay the loan at any time
• This evidence cannot be barred under California law
Damning by following?
• What is Kozinski up to here?
• Or “the rule of law”/judicial restraint in action?
What was Trident’s 2nd argument?
“in the event of a prepayment resulting from a default hereunder or the Deed of Trust prior to January 10, 1996 the prepayment fee will be ten percent (10%).”
What about this?
“in the event of a prepayment resulting from a default hereunder on the Deed of Trust prior to January 10, 1996 the prepayment fee will be ten percent (10%).”