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Colfax Envelope Corp. v. Local No. 458-3M

United States Court of Appeals for the Seventh Circuit

20 F.3d 750 (1994)

Relevant factsFree

A collective bargaining agreement summary sent to Colfax (plaintiff) listed a manning requirement as "4C 60 Press-3 Men," which Colfax interpreted as meaning presses 60 inches or wider needed only 3 workers — an interpretation advantageous to Colfax given its existing four-worker requirement for its wider presses — and Colfax agreed to the summary on that reading. Colfax later learned the term actually meant presses of 60 inches or less required 3 men, the opposite of its assumption, and sought a declaration that no valid collective bargaining agreement existed due to a lack of agreement on this essential term; the union (defendant) sought to compel arbitration under the agreement's arbitration clause.

IssueFree

Whether a party can rescind a contract due to conflicting understandings of an essential term if a reasonable person would have recognized the ambiguity or unclear term at the time of contracting.

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