Explain Certainty of Terms

Question

Explain Certainty of Terms?

Answer 1

The parties must reach agreement on all of the essential terms in a agreement. This ought to be possible to determine the meaning of the contract with a reasonable degree of certainty.

There are 3 matters which could arise cause a contract to fail for lack of certainty of terms:

1. Incompleteness: The omitted terms are so important that they warrant the conclusion that the parties have not yet reached an agreement; for example, lack of a price or a formula to determine the price.

2. Agreements to agree: A fundamental item is explicitly left subject to negotiation or agreement within a contract.

3. Vagueness: A term is so vague or imprecise that multiple meanings can be reasonably supported.