a refund the cells transaction is reversed so that payment is no longer forwarded to the merchant terms of the transaction price transaction buys and that positive interchange is also payment processing system to the credit card issuer bank for the benefit of the customer and the monies that were deducted from the sales proceeds the interchange fee and the car grand fees are then we fund the merchant benedix no no that's that's clearly isn't the case because your rage when your price e g paid for the services that your god is premised on a percentage is calculated on the gross vote goes volume these things are these or whatever but that's not the pricing scheme you have the pricing scheme you have was promised down that first dad was going to pay those fees and charge you a percentage of how much business you are doing right if i may go on that but i believe that's actually on your gross value not innocent just you that it was probably a function of what their costs were sold to their bad cause for people who are operating and maintaining devices that communicate with master card back office staff that probably reconciled other matters all they had cause and they probably also factored in those costs some fees they might be cover when they were returns made for and then they got refunds for mastercard but the the field you were charged was not premised on the fact that they were advancing your money to feel that they charged you was premised on volume not on the cost of what their costs were with regard to business of just paying the fees for you they're not going to make any money because they have a car with operating them so it makes perfect sense that it would be a function also of volume to some degree but there is you for a page i asked for an argument i'm asking for a page your honor the agreement provides that first data is paid in connection with or in consideration of the services that it provides and that appears page sixty six of the program guide section eighteen point one specifically it says in consideration of the services provided by us you sh is that when a sales transaction is for burgers and the monies that were paid to the issuing bank and the car brand here master card are refund you back to the interchange system what emergency could you see the agreement that you haven't told me yet the language of the fact that you're going to get some of this money back that money may very well factor into how they priced in charge of a percentage but unless you ask for to get back out on understand how absolutely right and they have cost on the return do they have a cost they do and they they charge for those services they charge benefits for those services and they were paid for those services what are they what are they charge be passed through people  that charge appeared on the monthly statement that first data provided to ben x then explained that so so they were charged that i'm sorry they were paid for the services that they provide in connection with the reversal of the transaction that they breached sentient each in point one at page eight sixty six which as i previously indicated provides that they are paid in consideration of the services that they and please the court mr levine for stand up i want to get right to the question that both judges parker and wesley asked were you asked about what provision in the contract that's relevant to an implied covenant claim as well because all that an implied covenant claim is a species of contract and what it does is it says it has to act in furtherance of provisions that are in the agreement the point is is that sometimes in a contract you know that people are entitled to certain benefits however they can act within the letter of the contract in a way that would deprive the other side of those benefits under the contract to this date through three rounds of briefings two rounds of briefing in the district court and one round of briefing here then access failed to point to anything in the contract any benefit that they were guaranteed under the contract and expressed benefit that the court would need to imply into the contract a refund obligation in order to ensure that they were not deprived of that benefit doesn't go through the money comes back and the other way you keep the money that's cries out for the it's fair because that's how the contract is set up we agreed with the merchant we have two types of pricing schemes that are well known in the industry there's discount rate pricing and there's interchange plus pricing if you want one where you only pay the interchange plus a markup so that you get the interchange back you select interchange plus under the contract how this works is we charge a price we charge two point six nine percent on transactions it's a price period it doesn't they try to say that our price she needs to be broken down into costs and that we are merely a conduit there is nothing in the contract that says that we are merely a conduit in fact everything in the contract says exactly the opposite these are sites that they have if you look at the blue brief it page seven in two thousand and six they're citing page eight forty four of the contract that describes interchange charges as charges that we first data must pay to the issuing banks at pages fourteen and twenty five of the blue brief and also a paragraph twenty seven of the amended complaint they cite page eighty fifty three of the contract that's in the record that says that the card organizations charge the acquirers interchange fees and assessments for submitting transactions into their systems which by the way we do pay every time we submit a transaction into the system whether or not it's inquires our first date as all the you say here everyone says there's ten seats there's no dispute that we act as the acquirer in this transaction it goes on you can look at the amended complaint paragraph thirty one that's a day three twenty six of the record that's the first data glossary that defines the interchange fees fees paid by b acquire to the issuer and again in this they even cite this court's walmart decision at page ten of their reply brief which describes this and well known fact the exact same bank there's nothing in this contract that says we are only a conduit but the contract does say as we will charge you a two point six nine percent price on transactions what the contract does not say is that we will ever provide you any refund if that price for any reason not much less it was it was a different sure you'd agree shore so the interchange plus option the way it works again this is well known in the industry they cite percent or something like that does apply to gross transaction volume but the interchange rate you pay the actual interchange rate if there is a refund the way it actually works in the system and they know because this is in the in iraq a tour is the way it worked here when there was a refund here there was actually a negative interchange rate charge called the commercial refund rate if you are paying the uplift of all interchange rate you get that back under interchange plus but to be clear they are trying to sow confusion about a contract  didn't select we're here to interpret the contract that they did select we think that under our contract it's absolutely clear it says it's a two point six nine percent price it does not say that you get any refund and under the impl can't imply the term into the contract that would fundamentally transform it or that would be inconsistent with the terms that are actually there if you imply the refund obligation here that they're asking for that would mean that we don't actually get to charge two point six nine percent sometimes we get to charge less so that's why it is fundamentally changes the fundamental premise of the contract which is we'll charge a price or not want to so one reason more predictability sorry not the past or the other way around why you would pick discount rate over more predictability you know two point six nine percent you don't there's five hundred probably five hundred categories of interchange rates and if you're doing interchange plus he might it might depend on what category you're actually going to do there's a whole range of rates that if you're choosing the discount rate here you're just going to get two point six nine percent you have some sort of predictability for that but i want to be clear too sometimes it's not the merchants choice sometimes you know first data may only enter into a contract on certain terms because they're not willing to assume risk in other circumstances but that's the reason why one would have so far what i've told you says our basic fundamental argument which the district court credited in its first decision on the first motion to dismiss was that a special appendix ten a set she said as well this is not a contract under which first data is merely a conduit this is a price and if you treat it any other way you're jettisoning the terms of the contract we think there's actually a cherry on top of that and that's the room transaction value chart gross is defined in the contract to mean all of the transactions excluding any refunds or set offs that means if you were to imply a refund obligation into this contract and say that your pricing actually does have to take refunds into account it would directly contradict that part of the contract now they argue a lot about what this means whether it's a heading whether it really should apply but at the end of the day they don't actually disagree that the two point six nine percent gets charged on transactions in other words when they ask for a refund here they're not saying take our refund and give us two point six nine percent of that refund they're only saying they want the interchange back so they're not even disagreeing that the two point six nine percent applies to the transactions so for both of those reasons we think that you absolutely can't imply a refund obligation in this contract that is nowhere provided for in the contract w fundamentally transform the nature of the contract and that specifically contradicts the gross transaction volume term which says that the pricing has to be based on the gross transaction volume excluding all refunds they argue that it's a heading and just to make sure that i'm heard on this we don't think that this is what counts as a heading that shouldn't be given any you know purpose in construction the provision that talks about where headings are for convenience of reference and should not control over the actual provisions appears in the program guide i think it's at a seventy eight and what we think it means is that sometimes headers are just subjects that are for convenient of reference of it you can find it in the contract where do i deal with this and that there's a provision that follows that and that you shouldn't let the heading control over the provision that's not the case with this part of the contract this is a form lots of people contract through forms it's a simple form if you actually said that all of these have any use then we don't even know what the price of the contract is that everything here then would be a heading for that this is not a mere subject matter that draws your attention here so that you know what provision is the actual provision in and of itself so on top of all that we can rest on our briefs on the argument but i want to make sure i make one point because it was it came up in the other argument on top of all of this we think that they failed to give notice and failed to satisfy a condition precedent by telling us within sixty days that they had a problem the only argument they're making on appeal is that they should be excused of that by the prevention doctrine and they say we didn't know you were getting the refund we don't think that's true it is up publicly known fact that there are these refunds and they are citing all of these public documents that are attached their complaint that say there are these ref and we didn't hide that from them in fact our contract encourages them to read the card organization rules indeed even in section eighteen of the contract we say if you want information on interchange go to these web sites and we tell them where to go it mastercard even tell them only key documents which was the account so that may be true but the prevention doctrine is not something that says if you don't know something you're excused from exercising a condition precedent it's if the other side actually hinders you from doing it the only how they got there is not is a function probably of their act i would suspect of their actual costs part of which are transit interchange fees which are labor costs part of which is debt reduction part of which is a utility part of which are lots of things and some which may also reflect the fact that they'll that they expect in the industry that they'll get some refunds which drive their cars down but you somehow think that because they pay the fees as part of their cost you are entitled to refund of it but you'd not in any way shown any way shape or manner shown that under dan agreement that the just the discount rate of two point six nine percent is a function soley of our interchange fees or some other calculation that somehow a understand at this point why if first data is able to provide that service in a way that increases for a status profit off of two transaction ok so let's say they developed a more sophisticated computer program that let them do their work of cheap would you have been entitled to share