2002 WL 32357103
In the 2002 case Sub-Zero Freezer Co. v. Cunard Line Ltd., the U.S. District Court for the Western District of Wisconsin heard a dispute between a freezer company (plaintiff) and a cruise line company (defendant) over a canceled cruise. The plaintiff argued they were owed a refund due to the defendant's breach of an implied covenant of good faith and fair dealing when they refused to reschedule or refund the cost of the canceled Mediterranean cruise, which was called off after the 9/11 terrorist attacks.
The defendant argued they did not breach any covenant since the contract included a clear cancellation policy allowing them to keep full payment if cancellation happened within 120 days of departure. The court partially ruled in favor of both parties.
The court ruled that the plaintiff failed to establish claims for promissory estoppel, breach of contract, excused performance, and fraudulent inducement based on extrinsic evidence, which was rejected due to the parol evidence rule. Nevertheless, the court allowed the plaintiff's claim for unconscionability to proceed, based on the alleged unreasonableness of the cancellation policy.
This case highlights the ways courts interpret contracts considering both express and implied terms, external circumstances, and the importance of good faith and fair dealing in commercial transactions. Courts must balance the interests of justice and fairness with respect for the autonomy and discretion of the parties involved.
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