The presence of a vague term will not prove fatal in
every case. Various devices exist for ascertaining the
meaning of terms.
1 The contract itself may provide the machinery
whereby any disputes about the operation of the agree-
ment can be resolved.
2 A court can ascertain the terms of a contract by refer-
ence to a trade custom or a course of previous dealings
between the parties.Part 3Business transactions
280
there was no contract at all. The parties needed to com-
plete the agreement by reaching a consensus about
unresolved matters such as rates of interest and fre-
quency of payments.
Comment.
(i)The decision might have been different in Scammellif
there had been usual or standard hire-purchase terms to
which the court could refer to ascertain the intention of
the parties.
(ii)A phrase which sometimes appears in contracts is
that one of the parties will use his or her ‘best endeav-
ours’ or ‘reasonable endeavours’. It would be a mistake
to think that such clauses are unenforceable for lack of
certainty. In Lambertv HTV Cymru (Wales) Ltd(1998)
the Court of Appeal held that the defendant’s promise to
‘use all reasonable endeavours’ to obtain rights of first
negotiation for the claimant to write books in connection
with a film was not uncertain and could be enforced.Bushwall Properties Ltdv Vortex
Properties Ltd(1976)
The parties concluded an agreement for the sale of 51^1 / 2
acres of land at £500,000 to be paid in three instalments.
The first payment of £250,000 was to be followed in
12 months by a second payment of £125,000 with the
balance to be paid after a further 12 months, and ‘on
the occasion of each completion a proportionate part of
the land’ should be released to the buyers. The Court
of Appeal held that as the parties had failed to provide a
mechanism for allocating the ‘proportionate part of the
land’, the entire agreement failed for uncertainty.tion. The parties failed to agree a price and the company
refused to buy petrol from Foley. The agreement to buy
petrol was held to be binding despite the failure to agree
a price because the parties had agreed a method by
which the price could be ascertained, i.e. by arbitration.
Comment. The price is an essential term of a contract
and, in the absence of a mechanism to ascertain the
price, failure to agree on this core term is likely to ren-
der the contract unenforceable. In Rafsanjan Pistachio
Producers Co-operativev Kauffmans Ltd(1998) the
High Court held that a contract for the sale of raw pis-
tachio nuts, which provided that the price was to be
agreed before each delivery, was an agreement to agree
and was not enforceable.Foleyv Classique Coaches Ltd(1934)Foley sold part of his land to a coach company for use
as a coach station, on condition that the company would
buy all its petrol from him ‘at a price to be agreed be-
tween the parties’. It was also agreed that any dispute
arising from the contract should be submitted to arbitra-Hillas & Co Ltdv Arcos Ltd(1932)The parties concluded a contract for the sale of a certain
quantity of softwood timber ‘of fair specification’ over the
1930 season. The agreement also contained an option to
buy further quantities in 1931, but no details were given
as to the kind or size of the timber or the date of ship-
ment. The 1930 agreement was carried out without diffi-
culty but when the buyers tried to exercise the option for
1931, the sellers refused to supply the wood, claiming
that they had only agreed to negotiate a further contract
for 1931. The House of Lords held that the sellers were
bound to carry out the 1931 option. The terms of the
contract could be ascertained by reference to the previ-
ous course of dealings between the parties.
Comment. It should not be assumed that just because
the parties have dealt with each other over a long period
of time that a court will find an obligation to continue doing
business with each other. In Baird Textile Holdings Ltdv
Marks & Spencer plc(2002) (discussed in Chapter 7 ),
the Court of Appeal held that, although B had supplied
M & S for 30 years, a continuing obligation to place
orders after M & S terminated the relationship could not
be implied because of lack of certainty.3 A meaningless term which is subsidiary to the main
agreement can be ignored and the rest of the contract
enforced.