*1 750 addition, in uncertainty;
genuine CORPORATION, Har ENVELOPE COLFAX be reasonable. reading must sured’s Plaintiff-Appellant, Co., 927 F.2d Ins. Harbor Corp. v. nischfeger denied, - Cir.1991), (7th certiorari 974, 976 v. 189, 160. L.Ed.2d 116 -, S.Ct. 112 U.S. 458-3M, GRAPH CHICAGO NO. LOCAL here. present condition such Neither INTERNA COMMUNICATIONS IC language construing similar courts Other AFL-CIO, UNION, Defendant- TIONAL See, e.g., Velez Todd. with are in accord Appellee. (1st 471, 476 Co., 599 F.2d Ins. Crown Life 93-3010. No. Pru Elsey v. Cir.1979) (alternative holding); 432, America, F.2d 262 Ins. Co. dential Appeals, Court States United Metropolitan Cir.1958); Biggs v. (10th 434 Circuit. Seventh (unpublished), Co., 573 F.2d 977 Ins. Life 25, 1992); (4th 14, Sept. Argued Cir. Feb. 1992 WL Co., 11 Wis.2d Ins. v. Travelers Rabinovitz 1, 1994. April Decided (1960); 807, Carnes 545, 105 N.W.2d Co., 746 S.W.2d Accident Woodmen Life v. Conti Credeur (Mo.Ct.App.1988); 105, 107 214, Co., 502 So.2d Assurance
nental v. Hick Co. Ins.
(La.Ct.App.1987); Gulf Life (Fla.Ct.App.1985), cit 762, 763
ey, 476 So.2d Services, Prudential Ins. Inc. v.
ing Starlite (Fla.Ct. 305, America, 418 So.2d Co. of Co., Ins. v. Travelers App.1982); Smillie (Mich. N.W.2d Mich.App.
Ct.App.1980). contrary, we would be held If we up setting in effect
rewriting plan Quad Graph
new insurance imper That would Great-West.
ics and Ins. v. Guardian
missible. Burnham Life (1st Cir. America, F.2d Co. of plaintiff,
1989). we Although sympathetic contract. As insurance redraft cannot analogous situa it in an put Circuit
the First to redraft no warrant
tion, “Courts palliate the effects contracts
insurance hard language on occasional
considered at 491.
case.” Id. is reversed di- judgment below this action. to dismiss
rections eligibility period. day work, the last Edwards was actually being geste, Mr. lay a coma on "actively when he at work" *2 envelopes. manufacturer It does some printing of envelopes, its seventeen employees who do printing -the repre- are by sented the defendant union. Colfax has printing presses. two One prints 78-inch- wide sheets four colors. prints The other colors, 78-inch-wide sheets five but most prints Colfax only four-color .time sheets on it. Colfax has so printing employees few it does not participate bother to in the collec- tive bargaining negotiations between the un- ion and Chicago Lithographers Associa- tion, an association for bargaining collective Chicago other printing companies whose employees represented by this Instead, union. whenever the union and the sign CLA a new collective bargaining agree- ment, the union sends Colfax a summary of changes the new made in the old If one. Colfax is content with changes, the union it copy sends complete agreement, new which Colfax signs and returns. If Colfax doesn’t like the negotiated terns by CLA, it is free to do its bargaining own with the union. The agreements spec- ify minimum for each type press used printers. Dean A. (argued), Dickie Michael I. Roth- agreement in force between 1987 and 1991 Pope, Cahill n & stein, Klaus, Kathleen H. fixed those minima as three men for four- Devine, IL, Chicago, plaintiff-appellant. presses color printing sheets 45 to 50 inches Eugene Cotton, Allison, Thomas D. Robert wide and four men for presses four-color H. (argued), Nichols Green, Jr., James W. printing sheets wider than 50 inches. Five- Cotton, Watt, King, Jones & Chicago, IL, for presses color printing sheets more than 55 defendant-appellee. inches wide five only unless men four printed, colors were in which event POSNER, CUDAHY, Before Judge, Chief required. four men were upshot Judge, McDADE, Circuit District that, agreements, under thése all of which Judge.* signed, Colfax had Colfax to man each of POSNER, Judge. Chief (which presses its presses) 78-inch except four men on the rare occasions when appeal This in a suit over collective bar- printed five-color on sheets its second gaining agreement presents a fundamental press, and then it had to a man. add law, issue drawing that of the line ambiguous contract, requiring In 1991 negotiated the union a new interpretation, that, and a contract because ment with the CLA and a summary sent represent cannot said to to Colfax. The enclosing letter all, the parties at interpreted, cannot be can the asked Colfax to indicate wheth- only be rescinded and left agreed er it to the terms in,the summary. Colfax, ways. (This their own plaintiff, may is a departure have been a past * Billy Joe Hon. McDade of the Central District of Illinois. the issue way to describe One complete signed the Colfax in which
practice, they disagree is that divides summary, than rather “4C 60" meaning of the about it.) In a anything of makes neither so that, believes Men.” Press —3 sum- manning requirements, section printing sheets four-color means and “5C Men” Press —3 “4C mary lists *3 that over, believes union while the and inches (in part be- Believing Men.” Press —4 and 60 inches presses four-color means fa- to be claimed who members union cause inches). that (down Remember to 45 under Col- had told new the miliar with use the had allowed previous the changes really like the that Colfax fax presses be on four-color crews of three-man operat- presses all it) that this meant inter The union inches. 50 45 and tween require now presses would four-color ed as upper extending the change as prets the them, presi- man Colfax’s to men three inches. range to 60 the three-man of bound shareholder, Pat- Charles majority and dent aof the Ordinarily dispute over a letter, indicating ac- union’s ten, signed the is, contains if the contract contractual summary. La- in the terms ceptance clause, to the for arbitrator arbitration an arrived, actual copy of the ter a be difference the But sometimes decide. sup- typo, which crucial a it contained but deep that goes so tween sum- understanding of the Patten’s ported agreed— they say ever impossible to agree- copy of the corrected mary. When a that a court they have contract even manning require- arrived, the finally famous interpret. In the might ment arbitrator from what different possibly it were misunderstood though enigmatic and stated ments Wichelhaus, summary. 2 H. & C. from of case had understood Patten Raffles (Ex. 1864), Eng.Rep. inches 46 and 60 presses Four-color ship delivery of a for the made men, four-color all three Bombay England on from ment cotton The men. required four inches over 60 to either ship Unbeknownst Peerless. all, and at Colfax benefited changes had not name ships of that were two party, there pressure, competitive under because was dates. One Bombay different sailing negotiate better terms. liked would have to one referred thought the contract agreement but the sign the refused Patten The to the other. ships, the other and was that Colfax position took the union contract; there was no that there court held summary. acceptance of to it its bound the minds.” See had been no Simpson, “Contracts section Brian under A.W. brought generally this suit Colfax of the Two Case § for The Cotton to Arrive: Act, for Tafl>-Hartley U.S.C. Peerless,” L.Rev. Ships Cardozo bar- no it has declaration (1989). because the union gaining contract term— essential agreed on an parties never “meeting of the premise print- Colfax’s for binding contract— required for a minds” for union counterclaimed ing presses. The Farns 2 E. obviously Allan strained. position union’s order arbitrate. 7.9, p. worth, § accepted new had was that Colfax par disputes arise because Most of all dis- arbitration ment, requires which some provide for foresee and did ties not inter- application or “arising putes out materialized —so contingency that now The district pretation contract.” of this on matter meeting minds was no judgment for granted judge as are treated yet disputes such at issue — union, reference concluding meaning, that the as not contractual disputes over for four-color and thus rescinding new grounds they where press back 60-inch putting meeting unambigu- signed it. a literal accepted they referred So before applica- required for an enforceable had no not minds is ously presses and to 60-inch fortunate, courts are contract, since which as such Colfax’s any presses, tion to other set us mind readers. Let as renowned appealed. presses. Colfax has 78-inch side, concept therefore, fact, to one meeting ask of the minds. Young, Cf. (else) explain how supra, Wichelhaus at 646. Intersubjectivity is not the Raffles and cases like it. It seems to us as it has to test of an enforceable contract. ought other courts that a contract to be liability terminable without The clearest cases for rescission on thus allowed to ways their own when ground that there was “no there is “no sensible basis for choosing be (or, better, that there awas “latent conflicting tween understandings” of con ambiguity” in the sense that neither party language, tractual as the court said in an knew that the contract ambiguous) case, Allen, American like Oswald v. Raffles ones in garbled which an offer is in transmis (2d Cir.1969), 417 F.2d quoting Wil sion. The cases we have cited are all of that Jr., Young, liam F. “Equivocation *4 character, if “transmission” broadly con Making Agreements,” 64 Colum.L.Rev. Ritchie, Vickery strued. 247, 202 Mass. (1964). 619, 647 In Oswald the misunder (1909), N.E. provides a further illustra standing arose parties because the did tion. A landowner and a signed contractor speak the language (literally). same In Bal they what duplicate believed to be copies of a istreri v. Nevada Livestock Production Cred contract for the construction of a Turkish Association, it Cal.App.3d 262 Cal. bath house. Because of a fraud the archi Rptr. (1989), parents the of an aspiring tect for which neither the contractor nor the thought they farmer pledged had property blamed, landowner could be copy signed the they Sebastopol owned in to secure a loan to by the price $23,000 landowner stated the as son, their and indeed the lender’s cover letter signed and the copy by the contractor stated property described the “your as Sebastopol $34,000. it as Through own, no fault of their residence.” But actual deed of trust signed had different contracts. parents’ listed the in home Petaluma as Or consider Konic Corp. International collateral. The court held that there had Spokane Services, Inc., Computer supra. been no of the minds. The seller quoted price “fifty-six twen and Oswald were in cases ty,” Raffles buyer which thought meant $56.20. party
which neither was blameable for the In $5,620. fact the seller had meant In both mistake; Balistreri case in which both cases permitted, was rescission the first be blameable, equally were parents for hav ing a in party fault, case which neither was at ing trust, failed read the deed of in second one which equally both were having lender for misleading drafted a cover fault, being careless in their utterance and (Sec letter. It is all the same. Restatement interpretation, respectively, ambiguous of an ond) (b) 20(l)(a), §§ If oral formula. neither can assigned greater be superficially Our case is similar. The actu- blame for the misunderstanding, no al terms of the 1991 nonarbitrary were mud- deciding party’s basis for which in died that understanding enforce, gave the union so the Colfax signed, and that Colfax making allowed to abandon the contract without lia possible bility. that the had 61, 127 Neel v. different under- Lang, 236 Mass. N.E. standings. (1920); The difference Konic between this case International Corp. v. and Spokane Computer Services, Inc., Colfax, the others is that unlike the 109 Idaho 527, 529, hapless promisors cited, 708 P.2d the cases have (App.1985). we h should These are not have realized that party’s cases whic one contract was understanding buyer unclear. thought more reasonable Konic than the —real- Restatement, Compare ly thought other’s. being he supra, quoted price was 20(2)(b). § $56.20, If permitted rescission and no doubt fell off stool when his case, that kind of every the enforcement of he price discovered a hundred mercy greater would be at the jury, thought. of a times than he But the ex- might which persuaded be pression that one Press” does not on “4C its face genuinely had idiosyncratic held an speak to minimum idea meaning, been, of its so that there had for a 4C 78" interpreta- Press. The union’s where the ship Peerless that of the cases like merely extended the.phrase
tion, that buried, possibility of ambiguity is three-man range for the old upper bound misunder grounds of mutual rescission inches, may 50 to from four-color latent ambi or, prefer, we standing, the term fact that correct. be may not person in A Col reasonable guity, arises. interpreta- clarified union restated realized its position would fax’s that it sent corrected tion Press —3 “4C 60" of the term interpretation question, be- on the not decisive Colfax might not- coincide Men” than the summary rather cause to which tribunal other party.or that is the contract full corrected would meaning of the term dispute over Colfax, if reason- But parties. these lost, dice, and threw the It be submitted. reading doubted able, not have could case. It cannot end of the that is the .and of the kind interpretations summary that and, if interpretation gamble on a favorable judge later the district union that the fails, with no repudiate the. entirely plausible. upon placed v. Miller Ins. Co. liability. Prudential Cf. interpreta- hope that its right had a (7th Co., Cir. 789 F.2d Brewing right prevail tion would 1986). by the constituted the offer accept case have a different We would interpretation its that either premise on the *5 whether the had ambiguity were 'over away from the walk it could or was correct duty disputes. their lose,” agreed to arbitrate win, you is I tails “Heads contract. contractual, interpre to arbitrate principle that that animates the spirit not the duty is that creates the the contract tation of rescission of ground a for ambiguity is latent Technologies, Inc. AT T v. the court. & for a contract. America, 475 Workers Communications contracting parties to for common It 1415, U.S. 643, L.Ed.2d 648 89 106 S.Ct. a is, signify to agree —to (1986). party a not But courts will allow a different party attaches each term which by clause arbitration a contractual unravel just gamble on a favorable a meaning. It is part of a contract that the clause arguing tribunal by the authorized interpretation voidable, fraudulent perhaps because that is prefer often Parties dispute arise. should v. Corp. Paint Flood & ly Prima induced. to take the way rather than this gamble in Co., 406, 395, 87 S.Ct. Mfg. 388 U.S. Conklin possible all their out try to iron time to (1967); 1801, 1807, Matter 1270 L.Ed.2d may never of which most disagreements, (7th horn, Corp., 763 F.2d v. NCR Inc. gambled consequence. Colfax on any have Cir.1985). must show reference that the an arbitrator persuading itself, say is to which clause arbitration four-color 60-inch summary to the any disputes arbitrate parties’ .to it means. Colfax believes what press, meant arise, might is vitiated over the contract that adopt- on the arbitrator’s gambled The union assent, fraud, or lack of consideration later made the union ing the Municipal Valleys Water Dis as in Three repeat, if agreement but, to full clear in — Co., 925 F.2d E.F. Hutton & trict v. (the agree) a contract there is (9th Cir.1991); that in short light of the collective summary, read disputes. agreed their to arbitrate never being agreement that was modi- bargaining Green, Securities, Wheat, Inc. First v. these.par- fied, (11th Cir.1993). Colfax and 818-19 F.2d ties. dealing long course the union had patently ambigu- always agreed to a to submit their contractual parties agree When arbitration, any dispute question term, so the they disputes to have submit ous was a dispute That is in this case by interpretation. their whether resolved over it meaning of dispute in con- their contract. are over what arbitrators courts for arbitrated, was, for that questions It to be interpretive so tract resolve cases—to resolving parties’ parties was chosen method It is when ambiguity. founded or not Colfax would disagreements, reasonably appear to whether agree terms that agreement had it not, signed on to the have unequivocal but them to each be agreement actually realized what the meant create an enforceable contract to submit the interpreted or could be to mean. Matter issue arbitration.
horn, Corp., supra, Inc. NCR 763 F.2d at Affirmed. CUDAHY, Judge, Circuit concurring: if, contrary We further: Even to our accept I without Judge reservation Pos- analysis, earlier nowas lucid explanation ner’s and admirable (in the artificial in which sense gradations various and nuances of the term term) of contracts uses the on the man- law “meeting of the minds” widely and the mis- ning requirements in agreement, the 1991 Wichelhaus, understood case of Raffles there was a of the minds on the (Ex. 1864). H. & Eng.Rep. C. arbitrating mode of disputes between the As notes, Professor Farnsworth our under- parties arising any standing of these issues “would improved be (including summary if [the] metaphor much-abused ‘meeting [of contract) previous signed. that Colfax Un- minds’] abandoned.” 1 E. Allan Supreme der Court’s decision in Prima Farnsworth, 3.5, § at 168 2n. Paint, dispute is arbitrable even if party argues one that the contract should be Nonetheless, this seems to inme some express rescinded because it does ways a much easier case than my either of actual parties, example colleagues’ opinions would Interpret- let on. because was induced by fraud. All that is ing the contract is the responsi- arbitrator’s important is that agreed bility. Only questions of contract formation adjudication that arbitration rather than are for the By framing court. question resolving the mode of their dis- minds,” as one of a “meeting of the *6 putes. A different many view in cases tries to turn ordinary question an of inter- deprive the arbitrator of important con- pretation formation, into one of thereby and remedy tract point This im- has —rescission. get out from under the arbitration clause. plications for scope of the arbitrator’s Judge opinion correctly Posner’s dismisses responsibilities, presently. of which more attempt. this here, however, I am inclined to affirm
We thus affirm judge’s the district deci- judgment of the sion, district court on its own point but out that her conclusion that terms and on the supplied by rationale disputed unequivocally bears the summary court. The settlement document to (which meaning assigned that she to it inci- which Patten assented purported to be a dentally is not identical to the union’s inter- manning of changes in pri- pretation, thought point she it a —60-inch (1987-1991) agreement or par- made presses, period thought union it a —while of negotiations. ties course the current range down) presses and does not —60-inch changes These are all on their face addressed bind the arbitrator. responsibility, His to requirements specific presses subject to the excruciatingly right limited specific having specific sizes and color capa- judicial decisions, review of arbitral to inter- following bilities. Thus relevant entries pret agreement. It will therefore be appear: open argue to to to the arbitrator 60" 4C Press —3 men: that, proper under a interpretation' of the Pressman, 1st 2nd Pressman and contract, really there no meeting of the Feeder manning requirements minds over the and 5C 78" Press —4 men: therefore that the contract should be rescind- Pressman, Pressman, 1st 2nd 1st Feed- after ed all. The point at essential this er, through 2nd Feeder or attrition 65% stage litigation of the is that whether or not Helper (as believe, there was we without to arbitrator) minds, bind the such meeting of entry There was no for the 4-color 78" there was sufficient understanding press mutual in which Colfax was interested. The meaning of the con- and that the tion manning for clause is that the inference inescapable therefore be submitted terms should tract changed. been had not press arbitration. have made arguing the issue caused case has difficulty this Whatever presses of “ranges”, e.g., points about
various
“doctrine” of
the fact
comes from
more.
and
60"
presses
or less
60"
seen
two
minds” can be
figured
various
apparently
“Ranges”
it as
way is
see
ways. The first
different
past and
parties in
agreements
typi-
We
formation.
of contract
an element
nothing in the
there
present;
where
formed
say
cally
“ranges.”
suggests
document
settlement
acceptance. But where
is an offer
there
indicated, to
refers, as I have
document
This
thing,
the offeree
offers one
the offeror
specific
say that no
another,
sometimes
accepts
we
These were
characteristics.
specific
having
there is
formed because
has been
respect
to which
only presses with
agreement on the
ad idem —no
consensus
changed the
view,
a “meet-
thing.
this
without
On
same
manning requirements.
minds,”
“simply no
ing of the
“ranges”
be
about
If deductions
could be bound.”
to which
ment
(and I
specific
see
from these
drawn
Chirelstein, Concepts and Case
A.
Marvin
this), they might
valid
to do
no reason
Analysis in the Law of
Thus, if
direction.
in a size-downward
drawn
to me
seems
Judge
concurrence
McDade’s
crew, would
a 3-man
press
a 60"
(“There
.was
either
this view
embrace
a smaller 40"
infer that
seem reasonable
formed,
and a
‘meeting
minds’
than a
require more
3-man
not
press would
minds’ and
‘meeting of the
not a
or there was
as a
suggested this
Union
crew.
parties.”).
no contract
therefore
hand Colfax
On the other
inference.
valid
alternatively be under-
could
The doctrine
press
change
the 60"
suggests .that
is the
metaphor. This
simply as a
stood
upward
should extend
to take.
Judge Posner
I understand
position
This
larger
press.
inference
to include
court de-
understanding,
where
On
support from
common
gain
could
minds,
there is no
clares that
larger
requiring
larger presses
sense
is no con-
saying that there
really
it is not
crews.
parties, but
relation between
tractual
*7
event,
took a clear
district court
any
the
In
a non-
declaring that it cannot discern
simply
in this matter:
position
interpretation
way
whose
arbitrary
to decide
designation of
agreement’s
settlement
The
either
will not enforce
best.
It therefore
is
marked con-
in
press size stands
specific
a
version,
allow
will instead
remedies
but
agreements that de-
prior
trast
restitution,
par-
and send
rescission
ranges;
it
in terms of
press sizes
scribed
exactly
ways. This is
separate
ties their
that a
the inference
support
does
it
a
does where
allows
court
what the
by the
referenced
press sizes was
range of
grounds
obligation on the
contractual
out of a
no
there is
ambi-
designation: Because
inAs
or of mutual
impossibility
mistake.
of the settlement
the terms
guity in
situations,
no
it
as
there were
is
those
if
ment,
precluded
is
consider-
the court
all,
suggestion that
though the
interpret
evidence
ing extrinsic
metaphor.
just
is
was formed”
“no contract
terms used.
meaning of the
believe,
literally
as Professor
should not
We
us,
that
Chirelstein
Op. at
WL
did
and never
exist.
does not
thereupon granted sum-
district court
The
you
that
need
Whether
counterclaim
the Union’s
mary judgment on
to form a contract
meeting of the minds
enough
It
clear
compel
arbitration.
usually
matter.
metaphoric
doesn’t
or
literal
set-
acceptance
that Colfax’s
way.
the same
typically
either
supports The result
unambiguously
tlement
were ever
as no contract
off
is a collective
position that there
the Union’s
it is
like this one
in
But
cases
formed.
containing an arbitra-
noted,
dispositive.
only
As
the court decides
point
The whole
of the lawsuit is the issue
Interpreting
whether a contract exists.
whether a contract existed between the
non,
vel
argued
Colfax,
contract is the
If
by
arbitrator’s task.
no meet-
as
whether there
ing
contract,
“meeting
was a
literally
of the minds
means no
term,
on an
requisite
essential
of contract
liberty
the arbitrator would not be at
—under
formation.
majority
finds that
req-
AT
Technologies,
& T
Inc. v. Communica-
“meeting
uisite
of the minds” exists because
America,
tions Workers
475 U.S.
“agree[d]
obviously
to an
ambigu-
(1986)
S.Ct.
right or already made. The this court
sion which ways. There have it both
majority cannot and a minds” “meeting of the awas
either not a formed, or there no contract be- therefore having decided This court parties.
tween purview of the beyond the former, the existence to decide function
arbitrator’s apply function of a contract —her To hold otherwise contract.
interpret arbitrator reverse license be to forma- as to contract court finding of this and not court
tion, belonging duty
the arbitrator. America, STATES
UNITED
Plaintiff-Appellee, Defendant-Appellant. YOUNG,
Allen
No. 93-1138. Appeals, Court States
United Circuit.
Seventh 8, 1994.
Argued Feb. 1, April
Decided