Business Law 12th Edition by Roger LeRoy Miller ,Frank Cross

Exercise 4

Interpretation of Contracts East Mill Associates (EMA) was developing residential "units" in East Brunswick, New Jersey, within the service area of the East Brunswick Sewerage Authority (EBSA). The sewer system required an upgrade to the Ryder's Lane Pumping Station to accommodate the new units. EMA agreed to pay "fifty-five percent (55%) of the total cost" of the upgrade. At the time, the estimated cost to EMA was $150,000 to $200,000. Impediments to the project arose, however, substantially increasing the cost. Among other things, the pumping station had to be moved to accommodate a widened road nearby. The upgrade was delayed for almost three years. When it was completed, EBSA asked EMA for $340,022.12, which represented 55 percent of the total cost. EMA did not pay. EBSA filed a suit in a New Jersey state court against EMA for breach of contract. What rule should the court apply to interpret the parties' contract? How should that rule be applied? Why? [ East Brunswick Sewerage Authority v. East Mill Associates , Inc., 365 N.J.Super. 120, 838 A.2d 494 (A.D. 2004)]