§201. WHOSE MEANING PREVAILS
(1) Where the parties have attached the same meaning to a
promise or agreement or a term thereof, it is interpreted in accordance with that meaning.
(2) Where the parties have attached different meanings to a
promise or agreement or a term thereof, it is interpreted in accordance with the meaning
attached by one of them if at the time the agreement was made
(a) that party did not know of any different meaning attached by
the other, and the other knew the meaning attached by the first party; or
(b) that party had no reason to know of any different meaning
attached by the other, and the other had reason to know the meaning attached by the
(3) Except as stated in this Section, neither party is bound by
the meaning attached by the other, even though the result may be a failure of mutual assent.
§204. SUPPLYING AN OMITTED ESSENTIAL TERM
When the parties to a bargain sufficiently defined to be a
contract have not agreed with respect to a term which is essential to a determination of their rights
and duties, a term which is reasonable in the circumstances is supplied by the court.
d. Supplying a term.
The process of supplying an omitted term has sometimes been disguised as a literal or a purposive reading of contract language
directed to a situation other than the situation that arises. Sometimes it is said that the search is for the
term the parties would have agreed to if the question had been brought to their attention. Both the meaning
of the words used and the probability that a particular term would have been used if the question had
been raised may be factors in determining what term is reasonable in the circumstances. But
where there is in fact no agreement, the court should supply a term which comports with community
standards of fairness and policy rather than analyze a hypothetical model of the bargaining
process. Thus where a contract calls for a single performance such as the rendering of a service or the
delivery of goods, the parties are most unlikely to agree explicitly that performance will be rendered
within a "reasonable time;" but if no time is specified, a term calling for performance within a
reasonable time is supplied. See Uniform Commercial Code §§1-204, 2-309(1). Similarly, where there is a
contract for the sale of goods but nothing is said as to price the price is a reasonable price at
the time for delivery. See Uniform Commercial Code §2-305.