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The Problem Of Certainty Notes

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The problem of certainty

Correspondence between offer and acceptance irrelevant if o There is need for further agreement o The terms are too vague or the material points have not been worked out nor agreed Where the agreement is conditional

Definitions o Contingent Condition Precedent =
? Contract is not to binding until the specified event occurs o Contingent Condition Subsequent =
? Where previously binding contract is to determine on the occurrence of the event

What will happen then depends on the construction of the clause o Both parties might be free to withdraw before the condition occurs o Both parties will not be free to withdraw unless the condition cannot be fulfilled o Or the parties need not do anything, but must not do anything to prevent the occurrence of the condition Where the terms of the contract are either too vague or incomplete to enforce

Courts take one of two approaches to this problem: o Anti enforcement approach
? Based on the usual guff of "freedom to contract" and that courts should not interfere etc. o Pro-enforcement approach
? Justifications for this:

Chen Wishart: Imprecision of business practise o Many business people attempt to avoid precise terms so that they won't lose a good deal

Chen Wishart: Necessity and difficulty of building in flexibility o By trying to agree terms that are flexible, parties may end up creating uncertainty. o Courts will have to try to fill the gaps.

Lord Denning: Protecting reliance o If a party has begun to act on an agreement, courts should strive to reasonably fill the gaps and uphold the contract.

Chen Wishart: unmeritorious pleas for uncertainty where parties are trying to escape a contract because it is disadvantageous to them owing to market fluctuations o Especially when they may have already received some benefit from them.

Courts have to be careful not to fall into the trap of making a contract rather than construing a contract. Overcoming Vagueness

Agreement where terms are too vague to enforce o Scammell & Nephew v Ouston: Term in dispute was that goods would be held on "hire purchase" without specifying exactly what this would mean.
? HoL

This is too vague to be enforced - there are all kinds of hire purchase agreements in widely different terms - o so no substitute available.

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