Uncertainty and Incompleteness

Before there can be a contract the terms must be expressed in a manner that is sufficiently clear and certain and the agreement itself must be substantially complete. Usually this means that the contract needs to deal with matters such as the names of the parties, the subject matter of the agreement and the consideration/price that applies. There may also be a need for other matters to be dealt with depending on the circumstances.

In determining whether a agreement is certain the court will often construe the language of the contract fairly, broadly and in a commercial fashion. In most cases the court will try to uphold the bargain reached by the parties but in some cases terms are held to be void for uncertainty.

Potential Scenarios - Uncertain and Incomplete Contracts

  • Many business are increasingly using contracts downloaded from the internet based on boilerplate clauses where such contracts could lack certainty and completeness;
  • Parties to a contract often negotiate terms without the help of a lawyer and in so doing forget to agree on essential terms;
  • In some cases contracts are drafted by lawyers but those contracts are not properly drafted so that the contract could be uncertain and potentially lead to a professional negligence claim;
  • An agreement to agree can in many instances be so uncertain as to make the contract incomplete depending upon the circumstances.

Important Quotes in Cases Where Contracts Lack Certainty

"...wherever words which by themselves constitute a promise are accompanied by words showing that the promisor is to have a discretion or option as to whether he will carry out that which purports to be the promise, the result is that there is no contract on which an action can be brought at all." - referred to in Meehan v Jones [1982] HCA 52

Let Us Help You

  • determine if a term of a contract is in fact uncertain or ambiguous and how to deal with contractual uncertainty;
  • consider the matters that contracts should specify including parties, subject matter and price;
  • understand the implications of a contract that is incomplete;
  • know how a court goes about dealing with uncertainty/incompleteness by mechanisms such as severance, and a typical motivation to try and hold parties to a bargain;
  • seek appropriate declarations from the court together with consequential orders when a contract lacks certainty.

For more information contact our breach of contract lawyers in Sydney, NSW.

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