LAWS 203 - certainty and completeness

Front

Define the third criteria that needs to be met, in order for a contract to be formed.

Back

In order for a contract to be formed, there must be a sufficient level of certainty and completeness. The court needs to be clear as to what obligations in the contract are enforceable.

Front

How does 'certainty and completeness' relate to process contracts?

Back

In the case of Transit, the court held that in order for a process contract to be enforceable, the agreement has to specify the methods to be used in order to reach consensus, and those methods have to be conveyed with sufficient certainty.

Front

How did the case of ECNZ elaborate on this point?

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In the case of ECNZ, the court held that in order for a process contract to be legally binding, the terms within such an agreement must be sufficiently certain. However, the ultimate contract (that the process contract is contemplating), does not need to have its terms specified in order for the process contract to be legally enforceable.

Front

What else did the court state in the case of Transit?

Back

The court held that process contracts are able to be legally enforceable, if the obligations of the parties are adequately certain enough for the court to ascertain them.

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How did these principles of law affect the judgement in the case of Transit.

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The court held that because the contract in this case, simply required the parties to reach consensus in 'good-faith', and because nowhere was it specified as to what the obligations of the parties were, the process contract in this case, was legally unenforceable.

Front

In the case of WCC, what was Justice Tippings statement in relation to these principles of law from the case of Transit?

Back

In the case of WCC, justice tipping stated that the council was ultimatley offering to negotiate in 'good faith', which, as stated by the court in the case of Transit, is far too uncertain to be enforceable. Because of this, offering to negotiate in good faith is an agreement to agree.

Front

What did the court hold in the case of Hillas?

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In the case of Hillas, the court stated that a promise to negotiate in 'good faith', can be enforceable in the circumstances in which there is consideration for the promise.

Front

What is the problem, with an agreement to negotiate in good faith? Why?

Back

In the case of WCC, the court held that an agreement to agree in good faith is an agreement to try to agree. Breach of such an agreement may be due to a lack of sincere effort put forward by the partie(s), in order to facilitate the agreement. Sincerity in such a case is subjective and therefore difficult to ascertain.

Front

In which class(s) of cases can the court hold that an agreement to agree in good faith, may be legally enforceable? Why?

Back

The courts can hold that a term within the contract that requires the parties to sincerely venture to seek consensus on a certain and complete agreement is enforceable, as was held in the case of WCC.

Front

In which class(s) of cases can the court hold that an agreement to agree in good faith, may not be legally enforceable? Why?

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The court will not give effect to a contract requiring the parties to sincerely venture to seek consensus on an uncertain and incomplete agreement, as was held in the case of WCC.