R2d § 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 first party. (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.
Professor's notes
Elements: (1) where parties have attached the same meaning to a promise or term, it is interpreted according to that meaning; (2) where parties attach different meanings, it is interpreted according to the meaning attached by one of them if at the time of contracting (a) that party did not know of any different meaning attached by the other AND the other knew of the meaning of the first; OR (b) that party had no reason to know of the different meaning AND the other had reason to know; (3) otherwise, neither party is bound by the meaning attached by the other and the result is no contract or a contract in a meaning neither attached.
Frigaliment v. BNS (the chicken case) operationalizes the buyer's "young broiler" meaning vs. seller's "any chicken" meaning. Buyer bore burden; lost.
Common misunderstanding: students conflate § 201 (whose meaning prevails when both intended SOMETHING) with § 20 (no manifestation of mutual assent at all). § 20 is the no-contract case (Raffles); § 201 is the contract-with-disputed-meaning case (Frigaliment).
Cases that operationalize this rule
Text
R2d § 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 first party.
(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.