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Incomplete And Vague Agreements Notes

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INCOMPLETE AND VAGUE AGREEMENTS


The basic position

Viscount Dunedin (Hillas v Arcos): "As a matter of the general law of contract all the essentials have to be settled".
o Viscount Maugham, (Scammell v Ouston): "parties must so express themselves that their meaning can be determined with a reasonable degree of certainty"
Iain Macneil describes the attempts to extract coherent principles from these cases as 'a fool's errand.'
Incomplete: an incomplete contract is one which leaves the parties not agreed on some matter, or in disagreement over it, or still aiming to reach agreement over it in the future.
o Courts do not exist to force agreement.
Vague: a vague contract is one which raises a question of what it is that the parties have agreed.
o Courts will not write a contract for a party, but they will give effect to a valid bargain.
Incomplete Agreementsw

Conditional Agreements - binding pending the occurrence of the condition (e.g. a contract of insurance, in which the insurer's obligation to pay does not arise until loss is sustained by the insured)
 Winn v Bull (1877) - Parties agreed in writing that the defendant would take a lease of a house from the plaintiff for a specified term at a specified rent "subject to the preparation and approval of a formal contract".
 Held no contract to enforce.
 Parties may settle majority of terms themselves but appoint solicitor to settle minor matters, may be bound. The rules of contract formation must take into account context.
o Deferred Agreements - "subject to contract" - courts'
presumption that binding legal relations are postponed until the conclusion of a formal agreement.
 Chillingworth v Esche [1924] - Sargant LJ: "it would require a very strong and exceptional case for this clear prima facie meaning [of subject to contract] to be displaced". What may look very like a contract can be prevented from binding by being made subject to the conclusion of a further contract.
 Commercial benefit as this allows parties to communicate without being bound (e.g. 'without prejudice'). No intention to be bound.
 Branca v Cobarro [1947] - a short agreement provided that Branca would buy the lease of a mushroom farm from Cobarro, but ended with words
"provisional agreement" subject to solicitor creating a

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