Opinion ID: 4530961
Heading Depth: 4
Heading Rank: 1

Heading: The district court’s analysis of Paragraph 15

Text: To be clear, reading Paragraph 1 alone, the district court would have concluded that the parties’ condition precedent unambiguously applied to formation, not performance. But the court concluded that Paragraph 15’s language “contradicts” the “clear and unambiguous” language of Paragraph 1, therefore creating ambiguity. The district court reasoned that the phrase “become null and void” in the third sentence of Paragraph 15 could only mean that the LPA was operative before the satisfaction of the condition precedent: “[a]n agreement cannot ‘become’ null and void if it was never operative or in effect in the first place.” The court thus concluded Paragraph 15’s “become null and void” language was “impossible to reconcile” and “inherently incompatible” with Paragraph 1’s “become operative” language. The district court then identified support for this position in Paragraph 15’s first two sentences by plucking phrases from the context of the entire, integrated agreement. The district court concluded that the first sentence (“All of the paragraphs of this Agreement are expressly conditioned on” the City and NASA entering a franchise agreement) “does not clearly and unambiguously state that the express condition pertains to the formation of the agreement as a whole.” And the district court read the paragraph’s second sentence (the LPA “shall remain in effect for three (3) years” as of the effective date of the City-NASA franchise agreement) as a party acknowledgment that the LPA was effective prior to the commencement of the three-year term. 14 INT’L BHD. OF TEAMSTERS V. NASA SERVS.