holding that district court’s construction of an agreement that rendered part of an agreement a nullity violated the rule against construing a contract so that part of it is unreasonable, unlawful, or of no effect
How later courts described this case
- holding that district court’s construction of an agreement that rendered part of an agreement a nullity violated the rule against construing a contract so that part of it is unreasonable, unlawful, or of no effect
- because agreements are to be interpreted as a whole, an interpretation that gives meaning to all terms is preferred to one rendering a part unreasonable
- because agreements interpreted as a whole, interpretation that gives meaning to all terms preferred to one rendering a part unreasonable
- addressing doctrine of discharge by supervening impracticability
Written by the judges who cited it.
The opinion
CARTER, Justice
(dissenting).
I dissent.
Although the Storage Tank Fund Board did not have the option of rendering either of two alternative performances, plaintiff did have the option of exacting a prescribed monetary compensation in the event of the board’s inability to perform the agreement. This is made clear in the contract language providing:
If in an Agreement year, the Board is not able to supply the twenty thousand ton minimum amount of petroleum contaminated soil as required by Article V(a) of this Agreement, the Board will pay [ASPI] liquidated damages of $70.38 for each ton the amount of Board-supplied soils fall short of the required twenty thousand ton minimum. This amount represents a reasonable estimate of [ASPI’s] damages associated with the Board’s inability to supply petroleum contaminated soils.
(Emphasis added.) The italicized words in the quoted portion of the agreement make it clear that the liquidated damages were not to be paid for a willful breach but were to be insurance against a failure to perform for reasons beyond the board’s control.
With respect to the force majeure provision, it is clearly repugnant to the plain meaning of the italicized language. This court has recognized that, when there are general and special provisions in a contract that are in conflict, the special provisions are to govern. Iowa Fuel & Minerals, Inc. v. Iowa State Bd. of Regents, 471 N.W.2d 859, 863 (Iowa 1991); Mopper v. Circle Key Life Ins. Co., 172 N.W.2d 118, 126 (Iowa 1969). In the present contract, the force majeure clause is a general boilerplate provision. The liquidated-damage clause is a special provision dealing with the inability of the board to perform the agreement. Consequently, the liquidated-damage clause should be given effect as written. I would affirm the judgment of the district court.