Uncertain Terms

Question 1

What happens if there are uncertain terms?

Answer 1

Courts may be able to step in and sever the term (or insert a term that wasn’t correctly implemented in the contract), or else the contract will be void.

Question 2

When will courts step in to fix uncertain terms?

Answer 2

1. There is an agreed mechanism to do so
2. There is future performance
3. There has been partial performance or where a party had made an investment in reliance of the agreement
4. In commercial contracts where both parties are familiar with the trade

Question 3

When will courts be unable to sever a term?

Answer 3

A term cannot be severed if it affects the substance of the agreement.