what is the importance of certainty and how is it approached?
a holistic assessment of parties betwen agt interactions may be used in order to ascertain whether they have reached a binding agreement if there is uncertainty of offer/expression of acceptance, it can .
what is the two step test from Fletcher Challenge?
- did parties intend to enter into legally binding agt immediately?
- courts will strive to cure uncertainty and essentially “save” contract from lack of certainty
what is the approach taken to step 1?
an objective approach is taken
- any doc setting out contractual terms
- transactional circumstances
- behaviour of parties after agt concluded
- commercial purpose
- evidence from parties as to intention
when is it likely they did not reach an agt?
the more nebuloius or salient the essential terms are, the more likly parties did not intend to reach agt
what do vague offers mean?
Wellington City - do not amount to an offer. judges cannot cross the line and make a contract between parties.
types of vague?
incompleteness, expressed behavioural standards, machinery
what counts as vauge?
BioTech Aus - contrat for employment included a reaonsable number of shares in company, this was held to be vague as no benchmark for “reasonable no. of shares”
however, if the vargue term surrounds a perihperal matter, it is not a big deal, but a vague clause cannot be severed if it would substantially change the nature of the contract
where is there tension in the courts?
between courts willingness to uphold contract + unwillingness to uphold vague/uncertain terms - stepping away from hollistic
what is agreements to agree? and Fletcher Challenge?
when there is a distinct gap in contract where a vital term has not been settled. historically they were NOT binding however, in Fletcher Challenge, the HoA was found w/ gaps in the contract “kind that could not be expected to be decided by the courts” thus showng that until essential terms were agreed to, agt is not binding. BUT the courts applied the modern approach, said they were bound NOW because they agreed later to reach an agreement.
what is incompleteness?
a type of “vague” where there is a written contract w/ most of main terms agreed upon however may express that parties are not bound until a separate ‘formal’ agt is created later on. possible scenarios include
1. intiial agt binding and later one is simply confirmative/more details
2. later agt is a condition of initial agt and there is no intention to be bound unless/until second formal contract is executed
BASED ON A REASONABLE INFERENCE from words + actions of parties
what is machinery?
a formula in contract as a yardstick for solving indetermining or named person to resolve issues (Nelson v Cooks) e.g. elements to be determined by market value/arbitration.
BioTech - sometimes, court will become machinery, but if there is no external standard they will not fill the gaps
what is expressed behavioural standards?
sometimes, clauses for requiring parties to act in a certain way are included in a contract e.g. good faith + reasonable. parties DO have the power to make their own ‘rules’ but they can sometimes be hard to enforce
Wellington City Council - CA said “good faith” was subjective and not enforceable, no guidance on how to determine - def does not required for parties to reach an agreement
when are terms “essential”?
if other party asserts there must be an agt upon them and asserts this to other party expressed or implied OR
term is legally essential for formation of a bargain OR
parties regard themselves the term essential (Fletcher)
all depends on the facts; there is different essential terms for
