Case Law Summaries

Northern Graphics, Inc. v. Cendant Corp.

• Opinion Date: April 12, 2001
• Business Law
• E-Mail

CONTRACTS; INTERPRETATION—The use of “a source of supply” contrasted with “the source of supply” is indicative that the parties did not intend to enter into an exclusive supply agreement.

A printing supplier, thinking that it was its customer’s exclusive supplier, discovered that its customer was using at least one other supplier. The lower court found that the supply contract was not “exclusive.” Its decision was based upon the language of the agreement which employed the term “a source of supply.” The reasoning was that language such as “the” source or the “sole” source would be the appropriate language if the intent of the parties was to enter into an exclusive contract. It didn’t matter that the printing supplier argued that it had an “‘exclusive’ agreement in mind when it offered a rebate and better price.” The lower court found such testimony barred by the parol evidence rule, and also pointed to an integration clause that would otherwise likewise bar this “hidden understanding” of what the printing supplier had in mind. On appeal, the printing supplier argued that the issue of whether the contract was exclusive or not should have been decided by a jury, and that there was an ambiguity in the contract. The Appellate Division affirmed the lower court’s decision.

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