09-2406 Superl Sequoia Limited v. The Carlson Co., Inc.

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Contracts
Bid floors

Reading a contract bid to create a cap, but not a floor on expenses frustrates the structure of the contract.

"Paragraph 1 of the May 7 email means that Superl Sequoia would have to accept less than $3.4 million, and would have to underwrite half of Carlson's expenses, if Macy's did not pay (or did not pay enough). But ¶2 is best read as limited to the participants' incremental costs-that is, the expenses of furniture and services not already provided for in the $3.4 million. That reading avoids undercutting Superl Sequoia's legitimate reliance on Carlson's acceptance of the $3.4 million quotation and avoids turning a firm price quotation into an asymmetric deal (in which Superl Sequoia had placed a cap on its expenses, without a floor under them). The entirety of the May 7 email shows that the parties were to be treated alike; using the $3.4 million bid as a cap but not a floor would violate that symmetry. Judges endeavor to read contracts to make economic sense, see Beanstalk Group, Inc. v. AM General Corp., 283 F.3d 856, 860 (7th Cir. 2002); Gottsacker v. Monnier, 281 Wis. 2d 361, 375, 697 N.W.2d 436, 442 (2005), and it would undermine the economic structure and function of this transaction to treat the $3.4 million as a cap on Superl Sequoia's expenses, while depriving it of any floor."

Vacated and Remanded.

09-2406 Superl Sequoia Limited v. The Carlson Co., Inc.

Appeal from the United States District Court for the Western District of Wisconsin, Crabb, J., Easterbrook, J.

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