- Even though a manifestation of intention is intended to be understood as an offer, it cannot be accepted so as to form a contract unless the terms of the contract are reasonably certain.
- The terms of a contract are reasonably certain if they provide a basis for determining the existence of a breach and for giving an appropriate remedy.
- The fact that one or more terms of a proposed bargain are left open or uncertain may show that a manifestation of intention is not intended to be understood as an offer or as an acceptance.
Certainty and Choice of Terms; Effect of Performance or Reliance
- The terms of a contract may be reasonably certain even though it empowers one or both parties to make a selection of terms in the course of performance.
- Part performance under an agreement may remove uncertainty and establish that a contract enforceable as a bargain has been formed.
- Action in reliance on an agreement may make a contractual remedy appropriate even though uncertainty is not removed.
Different in the UCC:
Formation in General.
- A contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract.
- An agreement sufficient to constitute a contract for sale may be found even though the moment of its making is undetermined.
- Even though one or more terms are left open a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy.
Options and Cooperation Respecting Performance.
- An agreement for sale which is otherwise sufficiently definite (subsection (3) of [UCC § 2-204]) to be a contract is not made invalid by the fact that it leaves particulars of performance to be specified by one of the parties. Any such specification must be made in good faith and within limits set by commercial reasonableness.
- Unless otherwise agreed specifications relating to assortment of the goods are at the buyer's option and except as otherwise provided in subsections (1)(c) and (3) of [UCC § 2-319] specifications or arrangements relating to shipment are at the seller's option.
- Where such specification would materially affect the other party's performance but is not seasonably made or where one party's cooperation is necessary to the agreed performance of the other but is not seasonably forthcoming, the other party in addition to all other remedies
Open Price Term.
- The parties if they so intend can conclude a contract for sale even though the price is not settled. In such a case the price is a reasonable price at the time for delivery if
- nothing is said as to price; or
- the price is left to be agreed by the parties and they fail to agree; or
- the price is to be fixed in terms of some agreed market or other standard as set or recorded by a third person or agency and it is not so set or recorded.
- A price to be fixed by the seller or by the buyer means a price for him to fix in good faith.
- When a price left to be fixed otherwise than by agreement of the parties fails to be fixed through fault of one party the other may at his option treat the contract as cancelled or himself fix a reasonable price.
- Where, however, the parties intend not to be bound unless the price be fixed or agreed and it is not fixed or agreed there is no contract. In such a case the buyer must return any goods already received or if unable so to do must pay their reasonable value at the time of delivery and the seller must return any portion of the price paid on account.