Does the term "chicken" in a commercial contract between a Swiss and a New York corporation specifically refer only to young birds suitable for broiling or frying, or does it include all birds of that species regardless of age and use?

A New York sales corporation (defendant) contracted with a Swiss corporation (plaintiff) in May 1957 to sell "US Fresh Frozen Chicken, Grade A, Government Inspected" in two weight categories: 2½-3 lbs and 1½-2 lbs. Upon delivery in Switzerland, the plaintiff discovered that the 2½-3 lbs birds were stewing chickens (fowl) rather than young broiling or frying chickens. The initial shipment was incomplete, with the remaining balance shipped on May 17. The defendant halted the second shipment at Rotterdam.

The contracts were negotiated through Mr. Stovicek, who was in New York representing the Czechoslovak government at the World Trade Fair. The negotiations occurred via cablegrams primarily in German, though the English word "chicken" was used in communications. At the time of contracting, market prices for broilers ranged between 35-37¢ per pound, while the contract price was 33¢ per pound. The defendant argued this price difference made it economically unfeasible to deliver young chickens as opposed to fowl.

The plaintiff initiated an action for breach of warranty, alleging that the goods sold did not conform to the description provided in the contract. The case was filed in a federal circuit court. Both parties stipulated that New York law would govern the interpretation of the contract at issue.

(Friendly, J.)

No. The term "chicken" in a commercial contract does not specifically refer only to young birds suitable for broiling or frying, but can include all birds of that species regardless of age and use. Multiple sources of evidence support this broader interpretation, including dictionary definitions that define "chicken" as a general term for the species, Department of Agriculture regulations that recognize various classifications of chicken based on age and quality, and testimony about trade usage that acknowledges different categories of chicken in the market.

The objective meaning of contractual terms must be determined through examination of multiple interpretive sources rather than relying solely on one party's subjective understanding. In commercial contexts, industry standards and trade usage carry significant weight when determining the meaning of potentially ambiguous terms. The broader interpretation of "chicken" is further supported by the economic realities of the poultry market, where different categories of chicken serve different purposes and command different prices.

When a contract fails to specify particular qualities or characteristics of goods, the reasonable interpretation is that the term encompasses all varieties of that good. The party seeking to narrow the definition bears the burden of proving that the narrower meaning was clearly intended or understood by both parties at the time of contracting. This principle applies particularly in international commercial transactions where parties may have different linguistic and cultural understandings of terms.

Communications between the parties prior to and during contract formation did not establish a mutual understanding that only young chickens were intended. The absence of express language limiting the type of chicken in the contract itself further undermines the claim that only young chickens were contemplated. When a party fails to include specific limiting language in a contract, courts will not read such limitations into the agreement absent compelling evidence of mutual intent.

The burden of proof in contract interpretation cases rests with the party asserting a specialized meaning of terms. Failure to meet this burden results in the court adopting the more general, commonly understood meaning of the term in question. This approach promotes certainty in commercial transactions by allowing parties to rely on ordinary meanings of terms unless explicitly modified.