Certainty

Question 1

What is the two step test for certainty in fletcher challenge

Answer 1

1. did the parties intend the agreement to be legally binding straight away
2. if yes, are the terms sufficiently certain

Question 2

How do we determine step 1 of the Fletcher Challenge Test

Answer 2

Did the parties intend the agreement to be legally binding straight away

Objectively determined via
- any doc setting out terms
- transactional circumstances
- behaviours of parties after agreement concluded
- evidence from parties as to intention

Fletcher Challenge: if there are matter left for future agreement or significant matters yet to be decided, it may be that they did not intend to be bind

Question 3

How do we determine step 2 of the Fletcher Challenge Test

Answer 3

If yes, are the terms sufficiently certain:

does not matter if term is unessential
terms are essential if
- party asserts their must be agreement on them
- the term is legally essential for formation
- the term was regarded by the parties themselves as essential

Question 4

When is a term uncertain

Answer 4

Vagueness or agreements to agree

Question 5

What is vagueness

Answer 5

The wording is so vague we don’t know what the contract means. In Biotech “reasonable number of shares” was too vague.

Question 6

What is an agreement to agree

Answer 6

Where there is a distinct gap in the contract because a vital term has not been settled it becomes an agreement to agree in the future and not binding

In Fletcher certain terms were left to be completed later and they could not be decided by the courts
- Parties can agree later but be bound now where there is a means to reach agreement
- This can be departed from if the terms are so important that they are needed now