LLB 120 Lecture Notes - Lecture 8: Le Classique

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amaranthyak49

31 May 2018

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Week 8: 133-145

4th requirement is that the agreement must be certain and complete

An offer will only be effective if it identifies with sufficient certainty the terms of the

proposed contract – the more comprehensive the agreement, the more likely the parties

intended to be legally bound

Two reasons why it is often difficult to determine if a contract is sufficiently certain:

1. Resolution of the issue necessarily involves a consideration of the nature of the

agreement and the particular circumstances in which the agreement has been made

2. Judicial attitudes differ as to the degree of certainty and completeness required

The requirement that a contract be certain has three aspects:

1. The contract must be sufficiently complete – the parties must at least reach

agreement on all terms they intended to fix by agreement

2. The agreed terms must be sufficiently certain and clear that the parties can

understand their rights and obligations and the courts can enforce them

3. The promises made by the parties must not be illusory. A promise is illusory if a party

is given discretion as to performance of a promise

Two ways in which an agreement affected by uncertainty may be saved

1. Where a particular term or part of an agreement is incomplete, uncertain or illusory,

it may be possible to sever the offending term or part. The remainder of the

agreement will then constitute a binding contract

2. Where an uncertain, incomplete or illusory provision has been inserted for the

benefit of one of the parties, that party may waive compliance with the offending

term and enforce the remainder of the contract

Completeness

No binding contract can be made unless the parties have reached agreement on all of the

essential terms

Three factors must be taken into account

1. The importance or essentiality of the term

2. Why the term has been left out: did the parties fail to reach agreement?

3. Whether the agreement remains wholly executory or has been wholly or partly

performed on one side

Essential terms

A term without which the contract cannot be enforced

E.g. in an agreement for a lease, the commencement date and the rental to be paid is

essential

In a contract for the sale of land, the parties must reach agreement on price

See Australian and New Zealand Banking Group Ltd v Frost Holdings Pty Ltd – pg 136 –

found an agreement was incomplete – Kaye J: the la does’t peit a out to iply a

term into a bargain between the parties for the purposes of making their bargain an

efoeale otat

Agreements to agree

An agreement to reach an agreement on an essetial te i the futue is’t idig

Where a court might have to imply a term may be an obligation to pay a reasonable price

for the sale of goods – pg 137

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Document Summary

4th requirement is that the agreement must be certain and complete. An offer will only be effective if it identifies with sufficient certainty the terms of the proposed contract the more comprehensive the agreement, the more likely the parties intended to be legally bound. A promise is illusory if a party is given discretion as to performance of a promise. Two ways in which an agreement affected by uncertainty may be saved: where a particular term or part of an agreement is incomplete, uncertain or illusory, it may be possible to sever the offending term or part. No binding contract can be made unless the parties have reached agreement on all of the essential terms. A term without which the contract cannot be enforced. E. g. in an agreement for a lease, the commencement date and the rental to be paid is essential. In a contract for the sale of land, the parties must reach agreement on price.

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LLB 120 Lecture Notes - Lecture 8: Le Classique

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