Certainty

Question 1

What is certainty

Answer 1

For an agreement to have contractual force the terms must have certainty

Question 2

Two step test in Fletcher challenge V ECNZ

Answer 2

1. Did parties intend the document to be legally binding immediately
2. If yes, are the essential terms certain?

Question 3

In first part of test discuss :

Answer 3

Objectively look at
- The document
- The behaviour of the parties
- parties intentions
Fletcher - If big matters are undecided it points to parties not having intention to create a legal document
Fletcher - parties can agree later but be bound now!

Question 4

What did fletcher say were essential terms in part 2 of the test? (3)

Answer 4

Party states there must be agreement on it
Term is legally essential for formation
Term is required as essential

Question 5

When is a term certain / uncertain? (3)

Answer 5

Vagueness
Incompleteness
Agreements to Agree

Question 6

Vagueness

Answer 6

Words can be too vague to interpret what is meant.
Biotechknowledgy Australia - ‘Reasonable amount’ of shares that employee entitled to is too vague.

Question 7

Incompleteness

Answer 7

There is a written contract but it may express that parties are not bound until another seperate ‘Formal’ agreement is made.

Question 8

Agreements to Agree

Answer 8

Usually not binding
Fletcher - Parties can agree later but be bound NOW where there is a means to reach agreement.