A brief summary of principles, recent developments and practical advice regarding clauses that may be void due to uncertainty. Courts are reluctant to strike down a contract because they are striking down a provision intended to produce legal effects, as indicated in Brown v. Gould [3]. It was stressed that things must always be balanced, people`s businesses must be treated as effectively as possible without violating essential principles and the law must not be accused of destroying collective bargaining. Since Big Co is unable to reach an amicable solution with Bob, Big Co has initiated a breach of contract procedure and is seeking compensation for damages under it. The Court is interested in the legal interpretation of the term „best effort“. It seems that Big Co and Bob cannot agree on what this term means because it is an uncertain contractual clause. Therefore, the task of the Court of Justice is a contractual construction. The question therefore arises as to what legal principles the courts invoke to interpret uncertain contractual terms. For the avoidance of doubt, when we refer to uncertain contractual clauses, we are referring to contractual language that is not sufficiently precise and clear or that uses terminology that may have more than one meaning. It has been suggested that an agreement is too uncertain to be applied if no time limit for execution is expressed or can be inferred from the nature of the case. This does not seem acceptable as a general proposal. A document in favour of a bank that promises to pay a certain amount no later than a certain date and a similar amount monthly in each subsequent month cannot be considered a promissory note (Carter v.
Agra Savings Bank Ltd.) since it does not specify the period for which it should exist and the amount to be paid. The obligation of a party to execute payment of the cheque only after receipt of the goods is void due to uncertainty, since the time limit for receipt of the goods is not determined. (b) A undertakes to sell B 100 tonnes of oil of a specific designation referred to as the object of trade. There is no uncertainty that the agreement will not become invalid. f) A agrees to sell to B „my white horse for five hundred rupees or a thousand rupees“. There is no indication as to which of the two prices should be indicated. The agreement is null and void. In Ashburn Anstalt v. Arnold [6], an agreement to rent a store in a prime location was not uncertain, as it could be established by expert evidence, since the expression is common in the respective real estate business. In the case of Daulat Ram Rala Ram v. State of Punjab [16], a clause in the arbitration agreement referring the dispute to the Chief Engineer is not vague simply because the reference refers to the officer who currently holds the position.
The use of the term „approximately“ does not make a contract vague, since in the case of money, it involves rounding a few pounds to a round number (Edwards v. Skyways [17]). There were also no other necessary and indispensable costs to be paid in addition to the purchase price for the return delivery and the execution costs. A contract is not uncertain simply because the execution time or delivery times, if the maximum quantity of goods to be purchased is not specified. Another form of conventional ambiguity is lexical ambiguity that arises when context is insufficient to determine the meaning of a word that has more than one meaning. To give a well-known example: Frigaliment Importing Co.c.B.N.S. International Sales Corp., 190 F. Supp. Section 116 (S.D.N.Y. 1960) dealt with whether a „chicken“ order applied to young chickens or chickens of any age that met the weight and quality specifications.
A more recent example of a case of lexical ambiguity is Provident Bank v. Tennessee. The courage of farmers. In. Co., 2007 U.S. App. LEXIS 10671 (6th Cir. 2 May 2007), in which the court noted that it was not clear whether the term „enforcement“ referred to foreclosure proceedings or sale by foreclosure. And see MSCD 8.107 regarding alternative meanings of the year. An agreement is void under Article 29 if its terms are vague and uncertain and therefore cannot be guaranteed.
Figure: A agrees to sell one ton of oil. The deal is void due to uncertainty, as the type of oil expected cannot be determined. Article 29 gives the meaning of an agreement that should be clear at first sight, as shown in Kovuru Kalappa Devara v. Kumar Krishna Mitter [1], but the effect may be given to the contract if its meaning is found with reasonable clarity. If this is not possible, the contract would not be enforceable. Simple difficulties of interpretation are not considered vague. The principle can be formulated as a party to a legal appeal for breach, the obligation must be able to identify the obligation with sufficient precision to justify the remedy. .