However, Scammell did not want to continue the sale until the hire-purchase terms had been agreed. Ouston then brought an action against Scammell for breach of contract, arguing that the hire-purchase terms had not been agreed and that the agreement was therefore considered void due to the uncertainty. Ouston was awarded damages by the trial judge because Scammell`s contract was wrongly dismissed and rejected. Consequently, the decision of the Trial Judge of Scammell was challenged before the House of Lords. Although the agreement is the basis of all contracts, not all agreements are enforceable. A preliminary question is whether the contract is sufficiently secure in its essential conditions[5] such as price, object and identity of the parties. In general, courts strive to “make the agreement work, so the House of Lords of Hillas & Co Ltd concluded against Arcos Ltd[6] that an option to purchase softwood with a `fair specification` was safe enough to be applied when read in relation to previous agreements between the parties. However, the courts do not want to “enter into contracts for persons”, which is why in Scammell and Nephew Ltd v. Ouston,[7] a clause setting the purchase price of a new van as “on hire-purchase terms” for two years was found to be unenforceable because there was no objective standard by which the court could know: what price was expected or what a reasonable price might be. [8] Similarly, in Baird Textile Holdings Ltd v.
M&S plc[9], the Court of Appeal ruled that, since the price and quantity to be purchased would be uncertain, in some cases no time limit can be implied for M&S to grant a reasonable period of time before the termination of its purchase contract. What is disputed is that the House of Lords has broadened this idea by reaching an agreement to negotiate in good faith a future treaty that is not safe enough to be enforceable. [10] Contracts can sometimes contain conditions that dictate how a contract can be accepted. For example, a contract may stipulate that you can accept the agreement in writing, orally, or through a specific thing. The word certainty seems so soothing and comforting. When you are sure of something, you feel relieved because you already know what exactly the result of a situation will be. In the same way, the law must also be established in such a way that there is clarity on how and why a particular law is interpreted in a certain way. There must be a common intention between the parties that there will be legal consequences that could result from the agreement for it to be considered a contract. For a valid and enforceable contract to exist, the agreement must consist of consideration or consideration (something for something). If Fred offers Jane $5 and Jane agrees, it`s not a valid contract unless Fred gets something for the $5 (it could be a gift – but not a contract). But one of the prerequisites for a contractual obligation or right to be binding is that the obligation or right must be secured. Otherwise, it is unlikely to be enforceable.
As a result, the agreements are unlikely to be enforceable. Contractual certainty, also known as certainty in a contract, means that any contract must be precise and not vague. The certainty here refers to the terms of the contract, if these conditions are not clear or uncertain, such an agreement between the contracting parties will not be considered legal. Vague or general conditions are not met when concluding a contract, since such a contract, if performed, could create unnecessary confusion and also invalidate the contract. Two recent court decisions have highlighted the key principles of contract law. However, the fundamental issue arising from both cases is the care required to ensure that the distribution and agency contracts clearly set out the terms agreed between the parties. In some cases, the terms of the contract do not have to be expressly stated. For example, A only processes imported watches.
B, a retailer, agrees to buy 100 watches. Here it is implied that the watches sold by A and bought by B are imported watches. Therefore, it is not necessary to mention such information implicit in the contract. However, it is important that contracts are transparent and predictable in order to avoid any type of dispute arising from the contract. Simply put, it`s important to be safe while following the law to avoid unwanted legal issues. Every case brought before the courts is unique and there are millions of such cases, so the law must be accurate and safe for correct interpretation. The function of “certainty” in contracts and the impact it has on contract law compared to English courts will be discussed in this article. For a valid and enforceable contract to exist, the offer must also be accepted. Uncertainty about the terms can lead to disputes, which in turn can lead to costly disputes between the supplier and the dealer or principal and agent over what has actually been agreed. Certainty in English law establishes rules on how judges interpret, separate or implement contracts, trusts and other voluntary obligations. Although the consideration is generally equal to or around the market value, there is also a concept known as “nominal consideration” or consideration well below the actual value or cost. This is often seen in contracts where something of value is exchanged for $1.
If Fred Jane offers $5 for a single sheet of paper, it would almost always create a contract, although a single sheet of paper is usually worth about 1 cent. Justice (principles of fairness) can help Fred in certain circumstances. The Supreme Court has given the example that a contract is binding, although a clause such as the price must continue to be agreed between the parties. In certain circumstances, it may be appropriate to imply a condition that such a price should be reasonable. It is interesting to examine the difference in approach between the Supreme Court`s decision in this case and the Court of Appeal`s decision in Morris v. Swanton (discussed above), where the provision that triggered the payment in this case was considered an agreement to the agreement. For example, if A agrees to sell a red car to B and, by appointment, A sells a blue car to B. Here, the execution of the contract does not take place in accordance with the agreed conditions, so it is considered abusive.
