Bethlehem Steel v. Litton Indus.
In Bethlehem Steel v. Litton Indus., a Pennsylvania Superior Court held that:
| â | All of the authorities both under common law and the Uniform Commercial Code in Pennsylvania, as well as in other jurisdictions, require that the inquiry into whether a contract exists begins at the ascertainment of the intention of the parties. If the parties intended no binding contract, this Court cannot employ the various rules of interpretation and construction to establish one. It is only after a mutual intent to enter into a legally binding contract is found from the evidence that the Court can proceed to determine the terms of the contract. If no such intent is found, the Court's inquiry must end there.
"The general principles of law appear to be very clear and are undisputed by the parties. That is, if the expressions in the agreement are clear and unambiguous, the Court must determine the intent of the parties solely from a reading of the writing itself. And the obligations of the parties are governed primarily from the writing. If the intent is not clearly expressed or cannot be gained from a reading of the writing itself, then surrounding circumstances may be considered in ascertaining the true intent of the parties. In that situation, subsequent actions of the parties tending to show the construction that they themselves placed upon the writing are important in determining the intention: Ryan v. [Hudak] Hudack, 409 Pa. 211, [185 A.2d 570] (1962). |
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Bethlehem Steel Corp. v. Litton Indus., Inc., 321 Pa. Super. 357, 372-73, 468 A.2d 748, 755 (1983).
This decision was affirmed by an evenly divided Pennsylvania Supreme Court. Bethlehem Steel Corp. v. Litton Indus., Inc., 507 Pa. 88, 488 A.2d 581 (1985).