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Misunderstanding in Restatement of Ks

Posted: Tue Sep 14, 2010 2:04 pm
by Reinhardt
I believe section 20 of the Second Restatement of Contracts is ambiguous or contradictory, but maybe someone can explain it to me.

§20. EFFECT OF MISUNDERSTANDING

(1) There is no manifestation of mutual assent to an exchange if the parties attach materially different meanings to their manifestations and
(a) neither party knows or has reason to know the meaning attached by the other; or
(b) each party knows or each party has reason to know the meaning attached by the other.

(2) The manifestations of the parties are operative in accordance with the meaning attached to them by one of the parties if
(a) that party does not know of any different meaning attached by the other, and the other knows the meaning attached by the first party; or
(b) that party has no reason to know of any different meaning attached by the other, and the other has reason to know the meaning attached by the first party.


I wrote up a nice truth table for but couldn't resolve properly the case of A(knows) & notA(has reason) & notB(knows) & B(has reason). Put into human English, this is the case if A knows the other's intention, but doesn't have reason to know it, while B doesn't know the other's intention, but does have reason to know it. My reading of the wording would indicate that there is a manifestation of mutual assent, that one party's view will control, and that both have an equal claim of this control.

Re: Misunderstanding in Restatement of Ks

Posted: Tue Sep 14, 2010 2:13 pm
by traehekat
Truth tables have no place in the law. :P

Re: Misunderstanding in Restatement of Ks

Posted: Tue Sep 14, 2010 2:15 pm
by Anonymous Loser
Edit: Never mind, I see what you are getting at. The wording of §20(1)(b) is somewhat odd, in that it doesn't capture the situation you are describing. It would make much more sense written as: "each party knows or each party has reason to know the meaning attached by the other."

Re: Misunderstanding in Restatement of Ks

Posted: Tue Sep 14, 2010 5:21 pm
by Reinhardt
This would be far more profound if I'd found it in an enforceable statute. Oh well.

Re: Misunderstanding in Restatement of Ks

Posted: Tue Sep 14, 2010 7:33 pm
by Reinhardt
Yes, it seems likely that even if the Restatement is worded poorly, the courts would still rule my hypothetical as what you called a mutual non-innocent misunderstanding.

Re: Misunderstanding in Restatement of Ks

Posted: Tue Sep 14, 2010 10:05 pm
by 12262010
betasteve wrote:It's a simply misread that probably a lot of 1Ls molest. Anecdotally, the type of situation where a party would "have reason to know" would be where they were dealing in an industry that had customary practices.. Courts will often charge participants in that industry with knowledge and meaning of the custom. (Often this is only in commercial dealings, though)


FTFY