Frigaliment Importing Co. v. B.N.S. International Sales Corp.
United States District Court, Southern District of New York
190 F. Supp. 116 (1960)
Frigaliment (plaintiff), a Swiss company negotiating largely in German, used the English word "chicken" intending only young broiling and frying chickens, while B.N.S. (defendant), new to the poultry trade, understood the order for "chickens" to include all types, including older stewing fowl; the contract incorporated Department of Agriculture grading regulations defining "chicken" to include both broilers and fowl, and the price agreed on was far closer to the market rate for fowl than for broilers. BNS shipped mostly fowl; Frigaliment complained after the first shipment but allowed a second shipment anyway, and after finding more fowl in that second shipment, sued for breach of warranty, with each side's trade experts giving conflicting testimony about whether "chicken" conventionally meant only broilers or included fowl as well.
Whether, when contracting parties in good faith construe an ambiguous contract term differently, a court may look to external factors such as trade usage, negotiations, and contract language to resolve the ambiguity.