Case 3 - Cocktail Parties

Summary

Jill is the manager of the professional event organiser ‘PartyMax’, who will host exclusive cocktail parties in the harbour during the Annual Film Festival. For that purpose, she rents a luxury yacht for the duration of 14 days from John, acting as director of ‘Afloat’. Jill and John agree in Clause 8 of the agreement that ‘PartyMax shall have the opportunity to return the yacht after seven days of the agreement, in which case Afloat will refund PartyMax a sum applicable to the remaining period.’ Jill pays the full rent of € 140,000 upfront. Nine days after commencement of the rental period, Jill returns the yacht and requests that PartyMax receive a refund of the rental fee of € 50,000 for the remaining five days. Afloat refuses and argues that Clause 8 means that PartyMax could exercise the option to return the yacht only within the first seven days of the agreement. Jill disagrees and contends that the clause means that PartyMax could return the yacht at any time as soon as seven days have passed. In support of its understanding of Clause 8 of the rental agreement, Jill refers to an email exchange that took place days before the conclusion of the agreement. In one email Jill writes: ‘I do not know yet whether we will actually need the yacht in the second week. Will the contract allow me to end the rental agreement whenever I want?’ In a reply, John writes: ‘Don’ t worry about it. Under the rental agreement, you will be allowed to bring back the yacht at any time after the first week and be refunded‘

• 1 [ Email Communication] Assume that the language of Clause 8 is ambiguous and that the email communication between Jill and John sufficiently shows that John's understanding of Clause 8 was the same as Jill’s. If in your legal system the email communication itself should not be considered to constitute an agreement or a modification to the agreement, what role, if any, may the emails between John and Jill play in the interpretation of Clause 8?