Incomplete and Uncertain agreements (Contract formation)

Question 1

Mercantile Credits Ltd v Harry

Answer 1

FAILURE TO SPECIFY SUBJECT MATTERS

Question 2

Devani v Wells

Answer 2

CERTAINTY OF TERMS - The object of the court is to do justice between the parties, and the court will do its best, if satisfied that there was an ascertainable and determinate intention to contract, to give effect to that intention, looking at substance and not mere form. It will not be deterred by mere difficulties of interpretation.

Difficulty is not synonymous with ambiguity so long as any definite meaning can be extracted. But the test of intention is to be found in the words used. If these words, considered however broadly and untechnically and with due regard to all the just implications, fail to evince any definite meaning on which the court can safely act, the court has no choice but to say that there is no contract. Such a position is not often found

Question 3

notable legislation

Answer 3

CERTAINTY OF TERMS - Sale of Goods Act 1979, s.8(2), 9

Question 4

May & Butcher v The King

Answer 4

AGREEMENT TO AGREE - No third party could set the price for the tents, and the court could not imply a price into the agreement. Therefore, no agreement had been made. The agreement between the claimants and defendant therefore was simply an agreement to agree, and not enforceable.

Question 5

Walford v Miles

Answer 5

AGREEMENT TO NEGOTIATE (LOCKOUT AGREEMENTS) - An agreement whereby one party for consideration agreed for a specified period of time not to negotiate with anyone else in relation to a sale of property could be enforceable but an agreement that was open-ended in terms of time was not enforceable.

Question 6

Branca v Cobarro

Answer 6

AGREEMENT ‘Subject to Contract’/ ‘Subject to Execution’ - Where there is a recorded expectation of a formal contract after terms have been informally agreed, there may nevertheless be binding contract in the interim period from the informal agreement until signing of the formal contract, if such is the proven intention of the parties.

A ‘provisional argreement’ is binding to prevent escape until a formal agreement can be created.