Opinion ID: 2600437
Heading Depth: 3
Heading Rank: 3

Heading: Interpreting the Addendum To Be an Assignment of Polushkin's Future Losses Would Be Unreasonable.

Text: One important guide to the meaning of a contract is that interpretations that give a reasonable meaning to a contract are preferred to those that impart an unreasonable meaning. As section 203(a) of the Restatement (Second) of Contracts provides: [A]n interpretation which gives a reasonable, lawful, and effective meaning to all the terms is preferred to an interpretation which leaves a part unreasonable, unlawful, or of no effect. The commentary to this section further explains this rule: In the absence of contrary indication, it is assumed that each term of an agreement has a reasonable rather than an unreasonable meaning, and that the agreement is intended to be lawful rather than unconscionable, fraudulent or otherwise illegal. [34] Interpreting the addendum to be an assignment of Polushkin's future claims to Maw would have unreasonable, arguably unconscionable, consequences. Focusing only on the decline in value of the permit, Maw's projected loss was $11,881. [35] His actual loss was only about half that because he sold the permit to Polushkin for a slight premium. By contrast, Polushkin's actual loss between the time of his purchase and the time of his death was $102,750, and his projected loss was $151,123. [36] To construe the addendum to assign losses of this magnitude to Maw would be unreasonable, given that Maw paid nothing for an assignment and will be fully compensated for the losses that he suffered. The same is also true with respect to Maw's claim for the loss in value to Polushkin's fishing boat. Polushkin did not buy his boat from Maw, yet Maw claims that he acquired the right to claim damages for its spill-related depreciation. Again, and for the same reasons as those previously expressed with respect to the decline in value of the permit, such a claim is unreasonable. Maw's claim to loss of income suffered by Polushkin on account of Polushkin's fishing endeavors in 1991 is also unreasonable for the same reasons. [37]