Certainty in offer and acceptance
Even though the parties may have appeared to make an agreement by the exchange of a matching offer and acceptance, the courts may refuse to enforce it if there appears to be uncertainty about what has been agreed, or if some important aspect of the agreement if left open to be decided later. In Scammell v Ouston, for example, the parties had agreed to the supply of a lorry on ‘hire purchase terms.’ The House of Lords held that in the absence of any other evidence of the details of the hire purchase agreement this was too vague to be enforceable, and there was therefore no contract.
This does not necessarily mean that all details of a contract must be finally settled in advance. It is not uncommon, for example, in relation to contracts for the supply of services for the precise amount to be paid to be left unspecified at the time of the agreement. This approach now has statutory force by virtue of s 15 of the Supply of Goods and Services Act 1982, which states that:
- Where…the consideration for a service is not determined by the contract, left to be determined in a manner agreed by the contract or determined by the course of dealing between the parties, there is an implied term that the party contracting will pay a reasonable charge.
- What is a reasonable charge is a question of fact.
The same rule also operates in relation to goods by virtue of the similar provision contained in s 8(2) and (3) of the Sale of Goods Act 1979.
The decision in Scammell v Ouston might be thought to open the door to an unscrupulous party to include some meaningless phrase in an agreement, which would then allow him to escape from the contract if he wished on the basis of uncertainty.
For more information on:
- Incomplete agreements
- Obligations distinguished from ‘machinery’