C.8 Definiteness

Question 1

What is the general principle for definiteness?

Answer 1

A contract may be enforced even though some contract terms may be missing or left to be agreed upon, but if the essential terms are so uncertain there is no basis for deciding whether the agreement has been kept or broken, there is no contract

    i. If not standard exists to measure value, courts don’t invent a value 
    ii. Previous dealings change this precedent

Question 2

When can a court supply missing term of the contract?

Answer 2

If the court believes that the parties intended to contract, and the court believes that it can supply a “reasonable” value for the missing term, it will generally do so.

    I. if subject matter is too vague or not stated, they will not add terms

   II. Example: rental agreement, rent rate to be determined later. Allowed. The court reasoned in this case, though, that the only thing left open for agreement was the rental price and they felt that they could step in and name a price without affecting the true intentions of the contracting parties

Question 3

What is a court not allow to supply missing term of the contract?

Answer 3

Where the subject matter of the contract has not been decided upon and there is no standard available for reasonable implication, courts ordinarily refuse to supply the missing term

Question 4

Side notes on U.C.C

Answer 4

i. The U.C.C expressly allows the court to fill in terms for price, place for delivery time for shipment, time for payment, etc. as long as the parties have intended to make a contract (§ 2-204(3)). The U.C.C. also implies a term requiring good faith in every contract for the same of goods (§1-203)
1. §2-305 – parties can conclude a contract for sale even though the price is not settled
2. §2-307 – delivery must all happen at once unless otherwise specified, and payment must be tendered at the time
3. §2-308 – the place of goods is the seller’s place of business or if he has none, his residence
4. §2-309 – time for shipment or delivery shall be a reasonable time

Question 5

Must there be an agreement to enforce an obligation?

Answer 5

Yes, especially with open terms and future negotiation taking place

Question 6

Can a binding agreement arise prior to signing of a formal contract?

Answer 6

Yes, if the parties intend so.

i. There is a strong presumption against finding binding obligation in agreements, which include open terms, call for future approvals and expressly anticipate future preparation and execution of documents

Question 7

Is an agreement to agree enforceable?

Answer 7

No, but preliminary contracts are enforceable (letters of intent, the LOI required them to do something in exchange for the LOI, hence there is a contract)