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Corbin on Contracts

Copyright 2007, Matthew Bender & Company, Inc., a member of the LexisNexis Group.

PART I FORMATION OF CONTRACTS

TOPIC A OFFER AND ACCEPTANCE

Supp. To CHAPTER 4 INDEFINITENESS AND MISTAKE IN EXPRESSION

1-4 Corbin on Contracts Supp. to § 4.1

Supp. to § 4.1 Vagueness and Indefiniteness of Terms

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(A) The following cases cite this section and its predecessors:

(1) Aramony v. United Way of America, 28 F. Supp. 2d 147 (S.D.N.Y. 1998) (quoting Corbin) (references to a ''defined contribution plan'' in a pension benefit plan, which would result in the total absence of benefits for the plan's beneficiaries, are akin to a scrivener's error; United Way intended the plan to be a ''defined benefit plan''). This case is also noted in §§ 1.23 and 2.10 of this supplement.

(2) Roussalis v. Wyoming Medical Center, Inc., 4 P.3d 209 (Wyo. 2000) (citing § 4.1 and quoting § 4.4 of Corbin). This case is also noted in § 4.1 and fully discussed in § 13.3 of this supplement.

(3) Air Exch. v. BCI Aircraft Leasing, 2001 U.S. Dist. LEXIS 2058 (N.D. Ill. Feb. 22, 2001) ('' 'Although the parties may have had and manifested the intent to make a contract, if the content of their agreement is unduly uncertain and indefinite no contract is formed.' Academy Chicago Publishers v. Cheever, 144 Ill. 2d 24, 27, 161 Ill. Dec. 335, 578 N.E.2d 981 (1991) , citing 1 Williston, Contracts § 37; 1 Corbin on Contracts § 95.'').

(4) Denver D. Darling, Inc. v. Controlled Environments Constr., Inc., 89 Cal. App. 4th 1221, 108 Cal. Rptr. 2d 213 (2001) . The plaintiff sued the defendant general contractor to recover certain retention proceeds being withheld by the defendant. The defendant counterclaimed, alleging that the plaintiff had failed to comply with contractual specifications regarding the flatness required for a concrete floor. Although the court found there to be ambiguity in the contract as to the flatness requirement, the court relied upon custom and usage in the building industry in order to supply the deficiency left by the parties' failure to agree on the flatness requirement. Citing the predecessor to this section of Corbin (1 Corbin on Contracts (1963) § 95, p. 400), and Larwin-Southern California, Inc. v. JGB Investment Co., 101 Cal. App. 3d 626, 641, 162 Cal. Rptr. 52 (Cal. App. 1979) , the court reasoned that as the trend in the law is to favor enforcement of contracts and to carry out the intentions of the parties if possible, custom and usage may be relied upon to supply a deficiency if it does not vary or alter the terms of the agreement.

(5) Nebraska Nutrients, Inc. v. Shepherd, 261 Neb. 723, 626 N.W.2d 472 (Neb. 2001) . Partial performance under a contract is evidence that the parties regard the contract as consummated and intend to be bound thereby. This case is also noted at § 4.7 of this supplement.

(6) Ross v. Belden Park Co., 2001 Ohio App. LEXIS 1862 (Ohio App. Apr. 16, 2001) . Although trial court has discretion to encourage and promote settlements and to enforce settlement agreements, ''vagueness of expression, indefiniteness and uncertainty as to any of the essential terms of an agreement, have often been held to prevent the creation of an enforceable contract'' (quoting this section of Corbin). Here, the plaintiff's version of the settlement agreement was incapable of insertion into the settlement agreement because it contained a clause that would violate public policy.

(7) Tranzact Techs. Ltd. v. Evergreen Partners, Ltd., 2001 U.S. Dist. LEXIS 14043 (N.D. Ill. Sept. 16, 2001) . Evergreen contracted with Tranzact to provide financial advisory services in preparation for a possible sale or other disposition of the company. Tranzact paid Evergreen $40,000 in retainer fees as well as additional amounts for work performed on an hourly basis. The contract also contemplated the payment of an ''investment banking fee'' if a sale was consummated within one year of the termination of the advisory agreement. A sale was consummated within the year and Evergreen claimed that it was entitled to a payment of some $875,000 as the investment banking fee, which Trazact had not paid. The court found a contract between the parties but held that an investment banking fee was not payable because the formula for calculating the amount due included ''transaction value'' that was not defined. Citing Corbin at former § 95 (1963 ed.), the court held that even though the parties intended the contract to include an investment banking fee, the agreement was unduly uncertain and indefinite such that no contract was formed as to the payment of such fee. Even if ''transaction value'' could have been assigned in some fashion, the contract formula would have led to a mathematically undefined result, because the formula required the use of a percentage of equity ownership held by the investor after the transaction-in this case, this percentage would be zero. Evergreen's argument that extrinsic evidence could be used to define the term was rejected since that definition would have contradicted the unambiguous terms of the agreement.

(8) F & K Supply Inc. v. Willowbrook Dev. Co., 288 A.D.2d 713, 732 N.Y.S.2d 734 (App. Div. 2001) . Two members of a family negotiated to settle fifteen lawsuits filed individually and on behalf of family-owned businesses. Their signed agreement required a male member of the family to relinquish ''certain claims'' and inheritance rights in exchange for ''not less than 25 percent'' of the property held by a female family member exclusive of mutually agreed-upon assets. The percentage of the female's holdings was to be negotiated but the negotiations failed to determine her holdings. While the court quoted Corbin at former § 95 (1963 ed.), recognizing the importance of mutual assent to essential terms but cautioning that courts should not be ''pedantic or meticulous'' in the interpretation of contract expressions, it found the agreement fatally indefinite since it did not define ''certain claims'', was vague concerning the obligation of the female member, and did not determine whether the agreement was binding only on the parties individually or also on the businesses.

(9) Lake Michigan Contractors, Inc. v. Manitowoc Co., 2002 U.S. Dist. LEXIS 9547 (W.D. Mich. May 21, 2002) . The plaintiff, LMC, claimed that one of the defendants, Bay Shipbuilding Company (''BSC''), had breached its agreement to convert an LMC barge into a dredge for a price not to exceed $4 million. BSC claimed that the $4 million price was an estimate. Upon completion, BSC had billed LMC for $7.7 million. LMC failed to submit any detailed plans for the conversion, making it impossible for BSC to submit a conventional bid. Instead, the work began with a general agreement concerning the cost of the hull at $1.00 per pound and the deck house at $1.15 per pound with other work being billed on a time and materials (T & M) basis. Numerous LMC changes in the hull and deck house, however, subsequently made those projects much more complex, thus making even the original estimates unreliable. The $4 million figure was stated by a BSC representative after the work had been in progress in answer to a question from LMC. Even the plaintiff, however, was unable to specify the work to be included in the $4 million price. BSC continued to bill beyond the $4 million and LMC continued to pay.

The court's quote from Shetney v. Shetney, 49 Wis. 2d 26, 38-39, 181 N.W.2d 516, 522 (1962) (quoting the predecessor to this section of Corbin), is instructive:

A court cannot enforce a contract unless it can determine what it is. It is not enough that the parties think that they have made a contract; they must have expressed their intentions in a manner that is capable of understanding. It is not even enough that they have actually agreed, if their expressions, when interpreted in the light of accompanying factors and circumstances, are not such that the court can determine what the terms of that agreement are.

Citing Corbin for the principle that an agreement can fail for vagueness of expression, indefiniteness, and uncertainty as to essential terms, the court found that the $4 million figure was only an estimate since the parties' course of performance in BSC continuing to build and LMC continuing to pay beyond the $4 million level clearly revealed no firm ceiling price for the work. Since the shipbuilder was not found to have made a promise to complete the dredge for $4 million, there was no basis for the plaintiff's promissory estoppel claim. Even if the $4 million statement had constituted a promise, reliance on that figure was unreasonable since the scope of the work had not been well defined. Moreover, no detriment was shown since the plaintiff failed to prove it could have finished the dredge elsewhere for a lower price. The court quoted Corbin in holding that a vague and indefinite agreement may be cured by the subsequent conduct of the parties. The parties' six-month course of performance showed that the shipbuilder provided the price schedule, that it billed according to the schedule, and that the plaintiff paid the bills. See also discussion of this case at § 4.7.

(10) Warren v. Sharabi, 2002 Cal. App. Unpub. LEXIS 3342 (Cal. Ct. App. 2002) . The plaintiffs sought specific performance of a contract for the sale of a partially completed house they had agreed to purchase from the defendant. The parties discussed fixtures and finishes and amounts the defendant would allow for certain finishes. When disputes arose concerning payment for the fixtures and finishes, the defendant claimed that the contract was unenforceable because the parties never came to a final agreement about the fixtures and finishes.

Concluding there was an enforceable agreement, the court quoted Corbin, ''If the parties have concluded a transaction in which it appears that they intend to make a contract, the court should not frustrate their intention if it is possible to reach a fair and just result, even though this requires a choice among conflicting meanings and the filling of some gaps that the parties have left.'' The court found no violation of the parol evidence rule in admitting extrinsic evidence to clarify ambiguities. Notwithstanding some uncertainty as to finishes and fixtures at the time they entered into the purchase agreement, the uncertainty was insufficient to make the contract unenforceable.

The defendant claimed that an agreement on finishes and fixtures was a condition precedent to his obligation to sell the property, but the court determined such an agreement had been reached. The defendant also alleged that he had canceled the agreement under a clause in the contract that allowed him to do so if the plaintiffs failed to provide written notice of their disapproval within 45 days of the date of contracting of any items unacceptable to them. Since the defendant did not provide the plans and specifications upon which the plaintiffs were to base their disapproval until months after this time period had expired, the defendant contributed materially to the non-occurrence of this condition, which was excused.

(11) Kostelnik v. Helper, 96 Ohio St. 3d 1, 770 N.E.2d 58 (2002) . Kostelnik reached an oral settlement agreement with Dr. Helper and Meridia Hillcrest Hospital in his action for the wrongful death of his wife. The following day, Kostelnik executed a release with the hospital in exchange for its agreement to pay $100,000. A week later, he executed a release with Dr. Helper in consideration of a payment of $1,100,000, which the parties contemplated would be made by Dr. Helper's insurer. Kostelnik was unable to collect the payment from the insurer when its financial difficulties caused it to be placed under the supervision of the state insurance department. Kostelink then sought a judgment for joint and several liability against the doctor and the hospital in the amount of $1,200,000, the total he expected to receive under the settlement agreements.

Relying on Corbin, the court recognized that, while agreement must be sufficiently clear, all agreements have some degree of uncertainty. In spite of the uncertainty that necessarily attends spoken or written language, parties must be held to their promises. The uncertainty at issue here was whether the doctor and the hospital had each assumed potential liability for a $1,200,000 settlement, i.e., joint and several liability, or whether this amount was simply the sum of two separate settlements. In concluding that the terms of the contract did not impose joint and several liability, the court considered a letter from the hospital, the releases and Kostelnik's actions. Although the hospital's letter confirming the settlement agreement stated that it would ''contribute'' $100,000 to the agreement, the court did not find ''contribute'' sufficient to prove the intention to impose joint and several liability. Further, the two separate releases Kostelnik executed with the hospital and the doctor indicated that each was released for its payment of $100,000 and $1,100,000, respectively. Finally, prior to his motion seeking a joint and several judgment, he had entered a motion for relief from judgment against ''Dr. Helper only,'' in the amount of $1,100,000. If he believed the parties were jointly and severally liable, he would have sought relief from judgment in the amount of $1,200,000. The case was remanded for enforcement of the agreement against the hospital and the doctor in their respective amounts.

(12) Barstow v. O.U. Real Estate, III, Inc., 2002 Ohio App. LEXIS 5020 (Ohio Ct. App. Sept. 19, 2002) . Wharton, the owner of O.U. Real Estate, agreed to act as an agent for Barstow's rental properties and to lease commercial office space and parking spaces from her. After Wharton performed substantial renovations on the office space believing that the lease was long-term, Barstow filed a complaint seeking a declaration that the lease was year-to-year and terminable at her will. The parties arrived at a settlement agreement during trial, providing for a ten-year lease and Wharton's payment of $4,500 in three installments. Barstow's attorney forwarded a proposed lease to Wharton's attorney but the parties disagreed as to some of the terms and a new lease was never signed. Wharton's attorney made the first of the three installment payments late, but paid the remaining two by the due date. Wharton filed a motion to enforce the settlement agreement. The trial court entered judgment enforcing the agreement. On appeal, Barstow argued there was no meeting of the minds since Wharton failed to agree to the lease prepared by her attorney when time was of the essence and he failed to timely tender the first installment payment. The court held that, where a dispute exists as to the existence of a settlement agreement or the meaning of its terms, the trial court must hold an evidentiary hearing prior to entering judgement, as was done in this case. If sufficient evidence exists, the finding of the trial court will not be disturbed. Quoting Corbin, the court noted that a settlement agreement will be enforced where it is found that the parties intended to be bound if it is possible to fill gaps and reach a fair and just result. The court found there was sufficient evidence that the parties intended to be bound since their agreement contained all necessary terms, including the price, and the parties halted litigation upon entering the agreement. Further, Wharton's failure to tender the first installment in a timely manner may have constituted a breach of the agreement but not a lack of agreement.

(13) Weston Invs., Inc. v. Domtar Indus., Inc., 2002 Del. Super. LEXIS 150 (Del. Super. Ct. Sept. 4, 2002) . E.B. Eddy Paper Co., (Eddy) was a subsidiary of Weston, the plaintiff. Eddy had invested in a partnership which consistently lost money. The partnership's losses eventually exceeded Eddy's investment and Weston continued to use them to reduce Weston's taxable income. The amount by which the losses exceeded the investment became Weston's excess loss account. When a parent corporation sells a subsidiary with an excess loss account in its stock, the amount of the excess loss account is subject to recapture and becomes taxable immediately upon the sale. The defendant Domtar purchased Eddy, thus causing a substantial tax liability for Weston. As part of the purchase agreement, Domtar had agreed to pay Weston for taxes ''relating to'' the Stub Period. Weston argued Domtar was liable for the tax on the recapture since, it contends, tax on the recapture related to the stub period since it was imposed due to the sale and during the stub period. Domtar argued the liability was based upon the recapture of past, unpaid taxes and was unrelated to the stub period. The court relied on general rules of contract construction applicable when a contract term is omitted. Although the parties addressed the allocation of taxes generally in their agreement, they did not address the specific problem at issue here. The court cited Corbin in support of the proposition that courts should not frustrate the intention of parties who intend to contract where it is possible to reach a fair and just result, even if it is necessary to fill in gaps or choose among conflicting meanings. Neither the plain language of the agreement nor considerations of fairness and reason supported Weston's version, which would have required Domtar to pay Weston's past tax liabilities deferred until the sale. The court found the result would be the same even though Weston agreed to make an election to treat the transaction as a sale of assets rather than a sale of stock.

(14) SR Int'l Bus. Ins. Co. v. World Trade Ctr. Props. LLC, 222 F. Supp. 2d 385 (S.D.N.Y. 2002) . At the time of the September 11, 2001, attack on the World Trade Center, more than twenty insurance companies had signed binders obligating them to provide property damage insurance but, with minor exceptions, they had not issued policies. In this lawsuit to determine the rights and obligations of parties, three insurance companies that had issued binders but no formal policies sought partial summary judgment and an order declaring the attack a single occurrence so that they would be liable for only one payment equal to the amount of insurance they each committed to provide. The insurers argued that they issued the binders based upon the terms of an insurance form supplied to them by the defendant real estate company's broker. The form included the definition of occurrence on which they relied: '' 'Occurrence' shall mean all losses or damages that are attributable directly or indirectly to one cause or to one series of similar causes ... .'' The real estate company disagreed that this definition was incorporated into the binders and instead argued that the insurers were bound to the terms negotiated between the lead underwriter and the insured. The court held that a binder is not a preliminary agreement but a contract of insurance, the terms of which are found by looking to extrinsic evidence where no integrated written contract exists. The court recognized Corbin's suggestion that, in its search for the terms, a court must seek to identify material matters with sufficient definiteness in order to enforce the actual bargain of the parties. The federal district court looked to the negotiations between the real estate company's broker and each of the insurers and determined that the insurers bound themselves based upon the terms in the insurance broker's form. The attack fit the definition of ''occurrence'' in the form since an ordinary businessman would conclude that the two planes hitting the world trade center was ''one series of similar causes.'' Accordingly, the insurers were bound to make only one payment in the amount of insurance they committed to provide.

(15) Althaus v. Cornelio, 58 P.3d 973 (Ariz. Ct. App. 2002) . The insurer filed this malpractice action against the attorneys that represented its insured in a wrongful death action. The attorneys argued the action was time-barred. Whether the action was time-barred depended on when the malpractice claim accrued and the accrual depended upon whether an enforceable settlement agreement had been made on June 3, 1999, or not until June 11, 1999. On June 3, the parties reached an oral settlement in the underlying wrongful death action, which was to be followed by, inter alia, execution of a formal settlement and procurement of releases as well as bankruptcy court approval. The trial court found that the claim accrued on June 11, 1999, when the parties executed the settlement agreement and the releases since an enforceable settlement agreement without contingencies did not exist until that date as a matter of law. It arrived at this conclusion by applying the rule that a cause of action for legal malpractice occurring in the course of litigation accrues when the plaintiff's damages are certain and not contingent upon the outcome of an appeal. The appellate court held that the rule is inapplicable where the underlying case is settled. Disposition of this case depended upon a determination of when the parties reached a binding, enforceable settlement agreement. Quoting Corbin, the court noted that where a party begins performance with knowledge and approval of the other party, such performance is nearly always evidence that the latter considers the agreement to be consummated and binding. Here, a trier of fact could conclude the insurer considered the agreement binding and enforceable as of June 3, since it knew the attorneys acted upon it after that date. The court treated the necessity for bankruptcy court approval as an agreement to delay the performance until such approval rather than a condition. A factual issue, however, remained, i.e., whether the parties to an oral agreement intend to be bound immediately or only upon the execution of a formal, written instrument. The court vacated the portion of the trial judge's order granting the insurer's motion for summary judgment and striking the statute of limitations defense.

(16) Arturi v. U.S. Office Prods. Co. (In re United States Office Prods. Co. Sec. Litig.), 251 F. Supp. 2d 58 (D.D.C. 2003) , and Meehan v. U.S. Office Prods. Co. (In re United States Office Prods. Co. Sec. Litig.), 251 F. Supp. 2d 77 (D.D.C. 2003) . These opinions filed on the same day against the same defendant (USOP) present identical issues. In Arturi, the plaintiffs sold their company (PNS) to the defendant in exchange for USOP stock in September, 1997. In Meehan, the plaintiffs sold their company (Aztec) to the defendant in exchange for USOP stock in October, 1997. In both cases, the plaintiffs alleged a February, 1998 agreement under which the defendant's president promised to compensate the plaintiffs for losses they had sustained in decreasing stock prices. Quoting Corbin in both cases, the court stated that vagueness of expression, indefiniteness and uncertainty as to any essential terms of an agreement have often been held to prevent formation of an enforceable contract. The court held that the alleged agreements were indefinite and contradictory and were, therefore, unenforceable.

(17) Willard Constr. Co. v. City of Olmsted Falls, 2003 Ohio App. LEXIS 2707 (Ohio Ct. App. June 12, 2003) . The plaintiff Willard and the defendant were involved in litigation which led to a settlement agreement stating that the plaintiff would receive payments, ''provided that Willard completes the necessary payment requests for funding to the State agencies funding the contract and Project.'' Willard submitted requests for most of the amount due, but not for $56,478.56 which he claimed was based on a tort claim and should not have been submitted for payment since it did not reflect work performed under the contract. The defendant claimed that the quoted language constituted a condition precedent that had not been met. The trial court agreed and granted summary judgment for the defendant. On appeal, the instant court affirmed. Under a plain meaning interpretation of the language, the court found no ambiguity and would not consider extrinsic evidence such as Willard's testimony as to his reason for not submitting a final request for the balance owed. Quoting Corbin, a dissenting opinion argued that the settlement agreement was ambiguous, particularly as to how tort claims were to be paid. Since issues of material fact were present, the dissent concluded that summary judgment was improper.

This case is also discussed in § 31.1.

(18) Kernz v. J.L. French Corp., 667 N.W.2d 751 (Wis. Ct. App. 2003) . The plaintiff negotiated an employment contract which required the defendant to pay the plaintiff's salary and benefits for the remainder of a three-year contract term if the defendant terminated the plaintiff without ''just cause.'' Nine months into the contract, the defendant terminated the plaintiff's employment for committing two safety violations. In litigation over the meaning of ''just cause,'' the trial court admitted evidence of the parties' subjective but uncommunicated intention. The plaintiff claimed that just cause required a showing of ''intentional wrongdoing.'' While the deposition of the defendant's negotiator revealed that he assumed the same meaning, the defendant claimed that ''just cause'' was unambiguous and meant ''inexcusable neglect.'' The jury found that ''just cause'' had not been shown and rendered a verdict for the plaintiff. The instant court recognized that subjective intention is typically irrelevant. Quoting Corbin, the court observed that the creation of an enforceable agreement is usually predicated on the language used in the contract and the expressed intentions of the parties. '' 'Intent' does not invite a tour through a party's cranium.'' It must be determined by the parties' words and actions. The court, however, also found that there is no single meaning of ''just cause.'' Emphasizing that the phrase was a negotiated term in this contract, the court held that if two parties expressly agree to the use of an ambiguous contract phrase and subjectively agree on the meaning of that phrase though neither communicates that intention to the other, the risks involved in delving into the minds of contracting parties with different subjective views are not incurred since the parties achieve exactly the agreement for which they bargained. The court affirmed the admission of extrinsic evidence of the parties' intended meaning of ''just cause.''

(19) Rose v. Mavrakis, 343 Ill. App. 3d 1086, 278 Ill. Dec. 751, 799 N.E.2d 469 (App. Ct. 2003) , appeal denied, 207 Ill. 2d 627, 283 Ill. Dec. 141, 807 N.E.2d 982 (2004) . The parties entered into an oral settlement agreement to terminate litigation in the course of court-supervised settlement discussions in the presence of the trial judge in his chambers. No transcript or court order memorialized the agreement. Subsequently, one of the parties sought to invalidate the agreement by asserting that it was lacking certain material terms and thus was unenforceable. Citing Corbin, the court recognized that in order for a valid contract to be formed, the promises and performance to be rendered by each party must be reasonably certain. The court, however, rejected the contention that the agreement lacked material terms simply because it did not specify when certain obligations were to occur. When a contract fails to specify a time for performance, the court explained, a reasonable time is implied. This case is also discussed at § 14.2.

(20) BYME, Inc. v. Ivy, 141 S.W.3d 913 (Ark. Ct. App. 2004) . The defendant, BYME, operated a relocation service company which, in exchange for certain fees, contracted with employers to purchase the homes of employees who were transferred and retained the homes in its inventory until they were resold. Pursuant to such a contract with the plaintiff-husband's employer, the defendant contracted with the plaintiff and his wife to ''purchase'' their home at its appraised value. The contract stated that the plaintiffs agreed to ''sell and convey'' the property to the defendant. A clause in the contract captioned ''express condition'' stated that the defendant's duty was expressly contingent upon the employer fulfilling its obligations to the defendant and that the defendant would be released from its obligations should the employer fail to perform. The defendant assumed the mortgage payments on the home until the employer failed to make payments under its contract with the defendant. The defendant notified the plaintiffs that the defendant would no longer make payments and demanded repayment of mortgage payments it had made to that point. The plaintiffs brought this suit for specific performance, which the trial court ordered on the footing that the express condition clause in the contract was fatally vague. On appeal, the instant court recognized that the terms of a contract must be reasonably certain, but a contract is reasonably certain if it provides a basis for determining a breach and providing an appropriate remedy. The court cited Corbin for the principle that extrinsic evidence may be sufficient to fill gaps and remove doubts in a contract. The court found the clause to be sufficiently clear to release the defendant from its obligation to the plaintiffs. This case is also discussed at § 30.7 note 25.

(21) Tire Distribs., Inc. v. Superior Court of Los Angeles County, 2004 Cal. App. Unpub. LEXIS 974 (Cal. Ct. App. 2004) . The parties signed an agreement to settle a lawsuit under which the defendant agreed to pay the plaintiff $50,000 pursuant to a payment schedule. The defendant claimed that the agreement was not enforceable because it included non-parties, because it did not express the consideration for the promise to pay $50,000, and because the defendant insisted the negotiations were not concluded even though he signed the agreement. The trial court denied the plaintiff's motion to enforce the agreement. The Superior Court notified the parties of its intention to vacate the trial court's decision and to direct the trial court to grant the plaintiff's motion. The defendant filed what it termed a ''response'' to the Superior Court's notice in which it repeated the arguments made at the trial court. The Superior Court recognized the modern trend to lean against unenforceability of a contract because of alleged uncertainty. Neither law nor equity requires every contract term to be expressed. Citing Corbin, the court stated that if the parties have concluded a transaction in which it appears that they intend to make a contract, the court should not frustrate their intention if it is possible to reach a fair and just result, even though the court may need to resolve conflicts and fill gaps the parties have left. The agreement contained, in parentheses, the name of the individual who owned the corporation. The court viewed such an inclusion in an agreement drafted by non-lawyers as nothing more than the identification of a party with his corporate entity. The court rejected the defendant's claim that the document failed to state any consideration moving from the plaintiff in exchange for the $50,000 payment since the caption ''Settlement Agreement'' and the absence of any other litigation between the parties clearly supported the logical inference that the plaintiff would dismiss the action in exchange for the payment. With respect to the defendant's claim that negotiations were incomplete, the court held that either the defendant subjectively believed that negotiations were incomplete when he signed the agreement or he had a change of heart. Either way, the final analysis remained. The court directed the trial court to vacate its order and to enter a new order granting the motion.

(22) Smith v. Smith, 43 Va. App. 279, 597 S.E.2d 250 (Ct. App. 2004) . The parties' prenuptial agreement stated, ''All property-real, personal and mixed-which each party may hereafter acquire in his or her own name or possession shall remain the separate property'' of the party who acquired it. Though neither party claimed that the agreement was fatally indefinite, the trial court so found, sua sponte. On appeal, the instant court recognized that property acquired during a marriage was presumed to be marital rather than separate. This presumption, however, can be defeated by the parties' agreement, which should be interpreted and enforced like any other contract. The court interpreted the words ''in his or her own name or possession'' as modifying the word ''acquire.'' Hence, it concluded that property acquired by each of the parties during marriage belonged to that party and should have been distributed in accordance with the parties' prenuptial agreement rather than with Virginia law regarding the distribution of marital property. The court explained that the law does not favor declaring contracts void for indefiniteness and uncertainty. The court quoted Reid v. Boyle, 259 Va. 356, 367-68, 527 S.E.2d 137, 143 (2000) , to the effect that ''[w]hile courts cannot make contracts for the parties, neither will they permit parties to be released from the obligations which they have assumed if this can be ascertained with reasonable certainty from language used, in the light of all the surrounding circumstances.'' 43 Va. App. at 287, 597 S.E.2d at 254 . Indefiniteness must reach a point where efforts at construction become futile in order to justify a court's judgment in declaring that a contract is meaningless. Citing Corbin, the court stated that such a conclusion should be ''at best a last resort.'' The court reversed the lower court's refusal to enforce the prenuptial agreement and remanded the case for the allocation of personal property in accordance with that agreement.

(23) Kaple v. Benchmark Materials, 2004 Ohio 2620, 2004 Ohio App. LEXIS 2313 (Ohio Ct. App. May 24, 2004) . Homeowners filed a complaint containing various counts pertaining to trespass to property and property damage due to the operation of a quarry near their home. Prior to trial, the parties began negotiating a settlement. On March 6, 2003, counsel for the homeowners (Morris) notified the court that a settlement had been reached. Later that evening, Morris discovered what he considered to be a problem with the language of the settlement agreement referring to ''then applicable statutory and/or regulatory law of Ohio. He contacted opposing counsel (Nelson) and requested the language be changed to ''then applicable law of Ohio.'' Morris did not indicate that, without this change, there was not a settlement agreement. Nelson advised Morris that although she was without authority to consent to the proposed change, she did not anticipate a problem with obtaining consent. Nelson then drafted the agreement with the change. The next morning, however, the homeowners decided that the settlement agreement was not acceptable to them. They contended that the language change constituted a counter offer and that they withdrew from the agreement before the counter offer was accepted. They also contended that they wanted the right to bring a future action for injunctive relief in the event of certain quarry operations. This matter, however, was never raised during the settlement negotiations. The defendants filed a motion to enforce the settlement agreement. The trial court found that a valid settlement agreement was reached. The appellate court cited Kostelnik v. Helper, 96 Ohio St. 3d 1, 770 N.E.2d 58 , reconsideration denied, 96 Ohio St. 3d 1489, 774 N.E.2d 764 (2002) , which quoted Corbin for the general proposition that all agreements have some degree of uncertainty to them, and in spite of resulting error and misunderstanding as to the language of agreements, people must be held to the promises they make. The court held that although the trial court correctly found that a valid settlement agreement existed, it erroneously ''clarified'' the terms of that agreement to include the change drafted by Morris. The court, therefore, remanded the case to the trial court to enforce the terms of the settlement agreement as originally written and agreed to as of March 6, 2003.

(24) Black v. Pheils, 2004 Ohio App. LEXIS 3873 (Aug. 13, 2004) . Pheils offered $25,000 in settlement of the Blacks' claim of abuse of process and malicious prosecution. The Blacks' attorney replied that her clients accepted the settlement offer on the express condition that the parties execute mutual releases including a clause that would preclude Pheils or his law firm from representing, in any capacity, any person or entity against the Blacks relative to the Blacks' ownership, use or improvement of their property. When Pheils refused to execute a release, the Blacks filed a motion to enforce the settlement which the trial court granted. On appeal, the Pheils claimed that there was no enforceable settlement agreement since it was fatally indefinite in relation to the conditions in Blacks' purported acceptance of Pheil's offer, one of which prohibiting any action by Pheils or his law firm was illegal. The court quoted Corbin's reminder that ''all agreements have some degree of indefiniteness and some degree of uncertainty,'' but ''people must be held to the promises they keep.'' It found that it was not necessary that mutual releases be signed at the time of the settlement to allow the settlement to be enforced. The Blacks had presented expert testimony that the mutual release language was the customary (boilerplate) language in release agreements in Northwest Ohio. As to the provision restricting Pheils and his law firm, the court noted that the Blacks had abandoned that requirement. Moreover, the court found that the provision was subject to the doctrine of severability since this illegal portion could be severed without destroying the symmetry of the contract. Finding that the parties had manifested mutual assent to the essential terms, the court affirmed the enforceability of the settlement agreement.

(25) Rohaley v. Compere, 2004 Alas. LEXIS 116 (Oct. 6, 2004) . The plaintiff and defendant owned adjoining properties. The defendant commenced construction of a 450-foot drive along the section line but it was subsequently determined that no section line easement existed. The plaintiff sued for trespass, alleging that significant property damage resulted from the defendant's construction. In the course of the litigation, the parties entered into a settlement agreement in open court providing that the defendant would restore the plaintiff's property in its previous condition at her own expense and pay plaintiff $16,000. The settlement was subsequently supplemented by the parties' agreement that the plaintiff would provide the defendant with an easement over a portion of this property in exchange for an additional $5,000. The parties thus agreed that the defendant would pay $10,500 upon the grant of an easement over plaintiff's property and make a second payment of $10,500 ten months later. The parties, who were represented by counsel during the court-mediated settlement conferences, intended the arrangement to be the final, complete agreement of this matter. Subsequently, the defendant's attorney prepared a written agreement designed to memorialize the parties' oral agreement. The written agreement contained several additional provisions that the parties had not previously discussed. The plaintiff found these additional provisions objectionable and moved to vacate the settlement agreement altogether. The plaintiff alleged that the parties shared the mistaken belief that a trial on the issue of a section line easement would have been lengthy and costly. The Court rejected this argument, noting that a party's mistaken assessment of the merits of his case or the likely length and complexity of trial cannot serve as a basis for setting aside an otherwise valid settlement agreement. The plaintiff alleged that the written draft settlement agreement included a confidentiality clause to which the parties had not orally agreed. The Court determined that this clause was not an essential term of the parties' settlement agreement and their subsequent failure to agree to it could not undo the agreement. The Court explained that although there is no one test to determine what makes a term ''essential'' to the agreement, it noted that other jurisdictions find a term ''essential'' when the parties regard it, at the time of contracting, as vitally important to their bargain. Here, the issue of confidentiality was not essential because neither party raised it during settlement negotiations. In addition, the very nature of this agreement, involving the settlement of a trespass claim and the grant of an easement, does not implicitly raise any issues of confidentiality. Thus, the parties' failure to agree on the necessity of a confidentiality clause did not void their agreement. The plaintiff also argued that the settlement was unenforceable because the written agreement contained a provision for interest on late payments that had not been previously agreed to. The written agreement, however, called for an interest rate of 4.25 percent. The Court rejected the argument that the failure to provide for interest charges in the original settlement agreement reached in court precluded the enforcement of the settlement agreement. Quoting Corbin, the court stated that just because the parties have left some issues to be determined in the future does not prevent courts from enforcing an otherwise valid agreement ''if some method of determination independent of a party's mere 'wish, will, and desire' exists, either by virtue of the agreement itself or by commercial practice or other usage or custom.'' Alaska statutory law governed the right of interest applicable to past-due judgments, which would apply in the absence of any agreement to the contrary, so the interest rate was not an ''essential term'' whose omission from the original settlement agreement made in court rendered that agreement inoperative.

(26) Convenient Food Mart, Inc. v. Countywide Petroleum Company, 2005 Ohio 1994 (2005) . Following lengthy negotiations in a lawsuit over a contract dispute, the plaintiff and defendant announced to the court that they had reached a settlement. They read the terms of the settlement into the record. The parties advised the court that they would submit the settlement to the court in writing the following day. However, one of the parties disputed several points contained in the proposed written settlement. The parties advised the court that they could not agree in final, written form. The trial court conducted a hearing on the parties' differences, and ultimately entered a judgment that contained the terms set forth by the parties in open court. The plaintiff appealed, arguing that the court erred by finding that the parties had a ''meeting of the minds'' sufficient to give rise to an enforceable agreement to settle their disputes. On appeal, the court noted that settlement of disputes is favored. The interests promoted by settlement are economic efficiency and permitting the parties to devote their resources and attention to more productive endeavors. In addition public interests are also furthered; specifically, judicial economy and efficiency by eliminating the necessity for further judicial consideration of the merits of the settled case. A valid settlement agreement must be reasonably certain and clear. Citing Corbin, the court explained that ''all agreements have some degree of indefiniteness and some degree of uncertainty. In spite of its defects, language renders a practical service. In spite of ignorance as to the language they speak and write, with resulting error and misunderstanding, people must be held to the promises they make.'' The court examined whether the parties entered into a settlement agreement in open court. The terms of the agreement read in open court had indicated that a judgment would issue and would be filed immediately, but that there would be no enforcement of such judgment unless and until there was non-performance of the agreement. Plaintiff only later claimed that it would not sign any settlement agreement unless a judgment was issued but not filed pending non-performance of the agreement. The court held that the terms recited in open court constituted an enforceable settlement agreement.

(27) Portman v. Zoetrope Corporation, 2005 Cal. App. Unpub. LEXIS 4093 (2005) . In 1997, Neil Portman contacted the president of American Zoetrope with a proposal for the latter to produce and develop a broad-based multi-media enterprise encompassing the fields of space and science fiction. The President of American Zoetrope, Fred Fuchs, arranged a meeting at Columbia Pictures during which Portman submitted to him a draft prototype of a space and science fiction multi-media project. At the meeting, Portman gave Fuchs an agenda listing potential projects to be developed by Portman and Zoetrope. He also presented a copy of a book entitled ''The Monuments of Mars,'' which was to serve as source material for a project developed within the framework of this project. Fuchs responded to the book by saying, ''I want this'' and stated that American Zoetrope had $50,000 to spend for development based upon ''The Monuments of Mars.'' The following month, American Zoetrope submitted a letter to Portman indicating American Zoetrope's interest in Portman's proposal, but also stating that American Zoetrope was not able to self-finance the development, and thus could not participate. Nevertheless, the parties subsequently entered into two alleged contracts, both entitled ''Agreement in Principle,'' which contained numerous ''proposals'' for American Zoetrope, Portman and the author of ''The Monuments of Mars'' to develop a broad-based agenda of multi-media and entertainment related projects, but there was no understanding expressed as to the exact type of projects to be developed; the proposed budget costs, the nature of the development, the number of contracts contemplated, the details of each project, such as production duties and cast characteristics, what, if any, affirmative steps the parties must take to perform, whether the parties were to work exclusively with each other, the compensation that the parties were to receive, the time for performance, the identity of the employees on each project, the identity of the projects, or the ownership of the projects. The agreements collectively contained 29 paragraphs, 25 of which began with the statement, ''It is proposed.'' The court concluded that the documents did not contain the requisite specificity of subject matter to be enforceable contracts. Citing Corbin, the court held that when the evidence shows that the complete subject matter under consideration is left for further negotiation and agreement, there is no contract, not for vagueness or indefiniteness of terms, but for lack of any terms. Here, the documents left the terms of the projects to be developed to future discussions. The parties merely expressed their interest in the possibility of working together in the future to produce and develop science fiction projects. The court contrasted these documents with contracts where parties expressly leave certain matters for future determination because the information is not yet available at the time of contracting. Here, however, the parties could have made the documents more definite and could have included more information as to this particular project sufficient for a court to determine the scope of duty and the limits of performance, but did not. The court concluded that the language of the documents showed that the parties were not yet ready to move forward with any particular project. The purported agreements did not impose obligations on the parties.

(28) Linton v. E.C. Cates Agency, Inc., 2005 Wy. 63, 113 P.3d 26 (2005) . The parties entered into a written agreement entitled Lease Option to Purchase. The agreement stated that the defendant seller would lease the property to the plaintiff buyers for the sum of $125 a month and would accept 75% of the lease payment toward the down payment to purchase the property for a total price of $20,000. The buyers would pay the balance of $3,000 toward the purchase price in July 1996 and enter into a sales agreement with the seller. In June 1996, just prior to the required $3,000 payment due date, the buyers' daughter was killed in a car accident. The buyers told the seller that their daughter's death resulted in emotional and negative financial consequences and asked if they could continue with the monthly payment arrangement rather than making the $3,000 lump sum payment. The buyers claimed that the seller orally agreed to modify the contract and they continued to make the $125 monthly payment. In June 2003, the buyers observed the property being shown to a potential buyer. They offered to pay seller the balance of the purchase price which seller refused. Despite the refusal, the seller continued to accept the monthly payments. The buyers then initiated this action seeking enforcement of the agreement. The district court granted the seller's motion for summary judgment finding that the agreement was incomplete, indefinite and unenforceable. Upon review, the state supreme court determined that the district court disregarded the evidence in the record that the original agreement had been modified and that the record contained sufficient evidence to create genuine issues of material fact as to whether an enforceable agreement existed between the parties. Relying on Corbin, the supreme court noted that courts must recognize that the argument that a particular agreement is too indefinite to constitute a contract frequently is an afterthought excuse for attacking an agreement that failed for reasons other than the indefiniteness. ''In such instances, the court should not be too fussy to determine how the gaps should have been filled.'' Indefiniteness may be cured by the parties' course of performance by the parties as well as implied terms supplied by law, including the parties' implied obligations of good faith and fair dealing. The supreme court determined that under the buyers' version of the facts, after the modification, there were no material contractual terms remaining to be negotiated. The property was identified with particularity as was the purchase price. The summary judgment was reversed.

(29) Aristocratic Leisure Limited v. Deutsche Bank Trust Company Americas, as Trustee, et al., 2005 U.S. Dist. LEXIS 16788 (S. D. N. Y. 2005) . The plaintiff sought reformation of a bond indenture to correct a scrivener's error. The plaintiff issued convertible bonds to qualified institutional buyers under an indenture that contained a scrivener's error skewing the stock-price trigger for plaintiff's right to redeem the bonds. Upon realizing the error, the plaintiff contacted the Trustee who acted on behalf of the convertible bondholders to correct it. The Trustee refused because the correction would allow it to call the bonds for redemption that would terminate the bondholder's rights to convert their bonds to stock. All parties agreed that there was a scrivener's error that was the converse of of what the parties intended. The plaintiff sent a notice of redemption to call the bond and sought a declaratory judgment that its redemption right became enforceable on November 22, 2004 and that it called for redemption on December 20, 2004, thus terminating the bondholders' right to convert and requiring the Trustee to redeem the bonds. The court explained that where there is clear and convincing evidence that parties share the same erroneous belief and their acts do not accomplish their mutual intent, a court should reform a contract to conform with the parties' intent. Citing Corbin, the court held that reformation is retroactive to the creation of the contract as it reflects the parties' intentions when entering into the contract. Though it reformed the contract to correct the scrivener's error and recognized the plaintiff's right to redeem the bonds on November 22, 2004, the court determined that under the terms of the indenture, redemption required more than just notice. It also required the deposit of sufficient funds and board resolution. Thus, the plaintiff's notice did not complete the redemption process.

(30) Evans v. Board of County Commissioners, 2005 UT 74, 123 P.3d 432 (2005) . A landowner argued that since the location of an easement was not fixed, he was deprived of the benefit of his bargain. Although the court acknowledged the importance of the location of the easement, it noted that there was no dispute that the landowner was fully aware that the land was burdened by an easement, and all essential features of the servitude were known except its location. The issue was whether the deed's failure to identify the location of the easement could be remedied without altering in any material way the bargain struck between the parties. The court relied upon Corbin's teaching that where the parties manifest an intention to make a contract, a court should not frustrate their intention if it is possible to achieve a fair and just result though the court will be required to fill some gaps left by the parties. Noting that the role of the court as contract 'gap filler' is neither new nor revolutionary, the court held that the most appropriate remedy was to assign the landholder the authority to select the location of the easement in the landholder's discretion which is limited by a duty to effectuate the stated purpose of the easement. This approach enjoys general acceptance among courts and commentators and eliminates the landowner's argument that the absence of a term locating the easement in the deed precludes the landowner from receiving the benefit of its bargain.

(31) Gurley, et al. v. King, et al., 2005 Tenn. App. LEXIS 504 (2005) . This case is more fully set forth at § 1174 and also cites §§ 2.8, 2.9 and 4.7.

(32) Kramer Associates, Inc. v. Ikam, Ltd., 888 A.2d. 247, 2005 D.C. App. LEXIS 650 (2005) . Defendant Ikam, Ltd., a Ghana-based corporation, sought investors for housing a construction project in Ghana and entered into discussions with Leo Kramer, president of Kramer Associates, Inc., an international management consulting firm based in the District of Columbia. Kramer agreed to secure financing for the development project, and Ikam transferred a total of $75,000 to Kramer and Kramer Associates. More than two and a half years later, Ikam filed a complaint against Kramer Associates and Mr. Kramer seeking $75,000 in damages, alleging that Kramer Associates had breached its contract with Ikam by failing to raise the capital for the construction project. Following a non-jury trial, the court concluded that no contract existed but that ''an unjust enrichment'' occurred that required Kramer Associates to make restitution. On appeal, the court reviewed the parties' negotiations. In January 1998, Ikam's president faxed a ''summary of the joint venture discussions'' to Mr. Kramer that stated that Ikam was ''responsible for drawing up proposals'' and that Kramer Associates was ''responsible for sourcing finance for the project.'' As part of the joint venture, Ikam's president (hereinafter ''president'') agreed to transfer $75,000 to Kramer Associates' bank account. The president traveled to the District of Columbia and met with Mr. Kramer in March, 1998, at which Mr. Kramer offered a proposed contract that Kramer had signed. The president, however, did not sign it. He stated that the terms of the written agreement ''did not represent what he and I had discussed.'' He also said that the written contract would have to be reviewed and approved by Ikam's attorney and board of directors. Although the proposed contract contained a clause stating that Ikam would pay Kramer Associates a deposit of $75,000 to be credited against any payment requirements, the president transferred that sum to Kramer Associates without signing the proposed agreement. Mr. Kramer acknowledged the payment in a March 19, 1998 fax that also stated ''we are committed to each other.'' In November 1998, Mr. Kramer expressed skepticism to Ikam over the financing aspects of the project. Eventually, in May of 1999, the president began requesting a full refund of the $75,000 after Mr. Kramer had failed to find any investors. The parties disputed the purpose of the $75,000 transfer. Kramer Associates and Mr. Kramer characterized the money as a payment to justify Kramer Associates working on the project. The president, however, claimed that it was ''seed money'' to show his credibility, and that he expected Mr. Kramer to refund the money to him when the project was about to take off. The trial court found that there was never a ''meeting of the minds between the parties.'' The court explained that although Kramer Associates accepted the $75,000, it did ''virtually nothing to secure financing for the project.'' Neither the unsigned contract document itself nor the parties' actions pursuant to their negotiations supported the contention that there was an agreement as to the purpose of the $75,000. The appellate court cited Corbin for the proposition that a court cannot enforce a contract unless it can determine what it is. It is not enough that the parties think that they have made a contract; they must have expressed their intentions in a manner that is capable of understanding. The court explained that even if the parties believed that a contract had been formed, it would be impossible for a court to determine what the terms of that contract were since there was no clear indication of the actual purpose of the $75,000 transfer. The appellate court affirmed the trial court's holding that Kramer and Kramer Associates were unjustly enriched at Ikam's expense and were required to make restitution in the amount of $75,000 to Ikam.

(33) State of Ohio, X Rel Delmonte v. Village of Woodmere, 2005 Ohio 6489, 2005 Ohio App. LEXIS 5850 (2005) . Delmonte filed suit against the Village of Woodmere seeking to compel the latter to allow him to inspect certain public records maintained by Woodmere. Delmonte filed with the trial court an offer of settlement in which he offered to release and/or dismiss with prejudice all claims if Woodmere supplied him with ten specific requests for public documents. Woodmere provided or made available for inspection all of the documents and records sought by Delmonte. Accordingly, the trial court marked the case settled and discontinued. Thereafter, Delmonte filed an appeal claiming, among other things, that the settlement agreement lacked consideration. The court explained that to constitute a valid settlement agreement, the terms must be reasonably certain and clear. The court quoted Corbin's point that, notwithstanding the imperfections of language and consequent misunderstandings, ''people must be held to the promises they make.'' The court explained that Delmonte's offer of settlement was clear. He agreed to release and/or dismiss with prejudice his claims in exchange for the production of ten groups of documents. Woodmere accepted the offer in exchange for the dismissal of the lawsuit. The court found that consideration was easily inferred.

(34) 8621 Limited Partnership vs. LDG, Inc., 900 A.2d 259 (2006) . In 1989, 8621 Limited Partnership and LDG, Inc. jointly purchased a parcel of commercial real estate known as the Wolfe Property. The Wolfe Property lies between properties known as the Chambers Parcel (owned by non-parties) and the LDG parcel owned by LDG. The parties planned to subdivide the Wolfe Property into two lots, one to be owned by LDG and the other by 8621. The Wolfe Property joint venture agreement provided that ''if access from the Chambers Parcel to Fenton Street and from the LDG Parcel to Cameron Street can be reasonably provided without interfering with the development of each parcel, the site plan shall contain such access.'' After acquiring the Wolfe Property, 8621 and LDG jointly demolished commercial buildings and for many years used it as a parking lot. Eventually, the Wolfe Property was subdivided into two lots; both had direct street access only onto a heavily trafficked street. Eventually, the president of LDG disclaimed any desire to access Cameron Street from the LDG Parcel or any obligation to provide 8621 access to Fenton Street. LDG then demanded that 8621 execute deeds conveying the two subdivided lots of the Wolfe Property to the individual joint venturers in fee simple, without any access easement. 8621 refused. LDG sued 8621 for declaratory and other relief, seeking an order requiring 8621 to execute a deed free and clear of any encumbrances. 8621 counterclaimed, seeking specific performance of the access provision in the joint venture agreement and a declaration that 8621 is entitled to ''access from the Chambers Parcel to Fenton Street if such access can be reasonably provided without interfering with the development of the subject parcels.'' The trial court held that the access provision in the joint venture agreement was unenforceable. The appellate court reversed. Citing Corbin, it explained that a court cannot enforce a contract unless it can determine what it is. An agreement omitting an important term, or that is otherwise too vague or indefinite with respect to essential terms, is not enforceable. The court held that the lack of specific terms does not necessarily make a particular clause in a contract meaningless. There are many types of enforceable commercial contracts that deliberately select an ''open'' term of performance, including those requiring ''best efforts.'' Commercial businesses are free to enter into mutually binding promises defining their future relationship by selecting a variety of non-specific contractual standards for measuring performance. The court concluded that LDG's promise to provide access if reasonable created a mutually binding obligation to use good faith and reasonable diligence in attempting to establish a side-street access route for the benefit of each subdivided lot. A reasonable fact-finder could conclude that, like the ''best efforts'' standard, this standard memorializes an obligation to act in good faith and to be reasonably diligent in attempting to afford the other access to the named side streets.

(35) Frey vs. Workhorse Custom Chassis, LLC, 2006 U.S. Dist. LEXIS 41846 (S.D. Ind. 2006) . Frey left his long-time employment with another company to go to work as president of a start-up company called Workhorse. The chairman of Workhorse promised Frey that if Workhorse's equity value grew while Frey was president, he would participate in the financial benefit of that growth. After receiving a written offer of employment from Workhorse, Frey sought more specifics on the potential financial rewards, especially how he would share in any increase in the equity value of Workhorse. Workhorse's chairman advised Frey that a ''phantom stock'' program would be established to enable Frey to participate in the equity growth of the company at ''normal'' or ''reasonable'' rates for the president of a start-up company. Frey and Workhorse never agreed on any specific amount or percentage of any equity participation for Frey. After accepting the position, Workhorse's profitability rapidly grew. The chairman of Workhorse sold a 72 percent interest in Workhorse's parent company to a third party. As a result, the chairman and others made millions of dollars, but Frey received no additional compensation. Frey eventually decided to leave the company and sued Workhorse for Workhorse's failure to honor a contractual commitment to allow him to participate financially in all increases in the equity value of the company. More specifically, Frey claimed entitlement to an amount of money that would reflect the ''normal'' and ''reasonable'' participation in equity increases for the president of a start-up company. The court granted Workhorse's motion for summary judgment on this issue, explaining that contract law requires the essential terms of agreement to be defined with reasonable certainty in order for the agreement to be enforceable. The court cited Corbin for the proposition that because the parties have left matters to be determined in the future should not prevent enforcement of the contract, if some method of determination independent of a party's mere ''wish, will, and desire'' exists. The court explained that in this case, it was not possible to enforce a promise that Frey would receive a ''normal'' or ''reasonable'' amount of participation in equity growth. Frey's employment arrangement was custom-tailored. Further, Frey himself testified that the range of reasonable or normal participation could be as wide as from 1.2 percent to 12 percent of the growth in equity value. The court explained that, to enforce a contract term on this topic would require the court to construct one for the parties. In short, the evidence did not provide sufficient definition to produce an enforceable contract for an unspecified degree of participation in equity growth. There was no agreement on what Frey admitted was an essential term. At most, the parties agreed to reach a better defined agreement later. Although the parties did not have an enforceable contract, the court noted that Frey may be able to produce sufficient evidence to establish a claim of promissory estoppel.

(36) State of Ohio, Department of Taxation, et al. v. Lomaz, 2006 Ohio 3886, 2006 Ohio App. LEXIS 3850 (2006) . On March 14, 1994, the State of Ohio received a judgment against Lomaz and Midwest Fireworks Manufacturing Company, Inc. (''Midwest'') for $48,318.59 due for unpaid state sales tax. Lomaz filed a motion to enforce a settlement agreement contending that the State had previously notified the trial court by phone that the matter was settled and that an entry would follow. The State filed a motion to strike Lomaz's motion to enforce settlement claiming that it had never agreed to any particular proposal submitted by Lomaz. When the trial court found insufficient facts on which to base an enforceable settlement agreement, Lomaz appealed. The instant court recognized that the law favors settlement agreements which may be written or oral, but they must evidence the elements of offer, acceptance, mutual assent, contractual capacity and consideration like other contracts. While a written memorial of settlement is preferable, an oral settlement is enforceable if there is sufficient particularity to form a binding contract. Citing Corbin, the court explained that this is because people must be held to promises they make. Upon review of the record, the court determined that a factual dispute existed as to whether the parties entered into a settlement agreement. Thus, the trial court did not err by refusing to grant the motion to enforce settlement.

(37) Targus Group International, Inc. v. Sherman, et al., 2006 Mass. Super. LEXIS 334 (Mass. 2006) . After the second day of a mediation session, disputing parties reached an agreement to settle all claims arising out of or relating to the acquisition of defendants' corporation by Targus Group International, Inc. (''Targus''). The agreement was prepared and initialed by the mediator, executed by duly authorized representatives of the defendants and Targus and endorsed as approved by counsel for the defendants and counsel for Targus. One of the provisions in the agreement called for the execution and exchange of final settlement documents and mutual releases in a form satisfactory to counsel. Drafts of the proposed final settlement papers were exchanged, but the parties failed to reach an agreement on them. Suit was then filed by Targus. The defendants claimed that the settlement papers from Targus contained provisions different from and not included within the agreement. Targus disagreed with this allegation. Upon review, the court sought to determine whether the agreement was a binding agreement or whether it was merely an agreement to reach an agreement. Citing Corbin, the court noted that a ''purported contract which is no more than an agreement to agree in the future on essential terms, or one which does not adequately specify essential terms, ordinarily will be unenforceable.'' The court noted that the agreement was a result of an elaborate process of sophisticated mediation, which was guided by counsel and facilitated by a respected mediator. The court concluded that the signing of the document memorializing the agreement of the parties signified that there had been a meeting of the minds. Further the court noted that ''[i]t is not required that all terms of the agreement be precisely specified, and the presence of undefined or unspecified terms will not necessarily preclude the formation of a binding contract.'' The court concluded that the agreement in question contained all the essential terms for an enforceable contract and that the parties were bound by it.

(38) Dunlap v. Dunlap, 131 P.3d 471, 2006 Alas. LEXIS 101 (Alas. 2006) . Paragraph 13 of the parties' divorce settlement agreement contained a provision that addressed the disposition of any retirement benefits husband might receive if he left the army prior to his retirement eligibility. In 1994, the husband left the military and bought out his retirement benefits for a lump sum. Pursuant to the settlement agreement, he deposited $10,000 into two educational funds for his children, which he later cashed out. Over the years, the parties repeatedly went to court over the child support payment amount and the application of the $10,000 as income for the purposes of calculating child support. Eventually, the husband argued that paragraph 13 of the settlement agreement was too indefinite to be enforced; specifically, it failed to state how the educational fund would be administered. Although the court noted that the paragraph indeed did not specify how the educational fund was to be administered, it concluded that this did not render the agreement too indefinite to be enforced. Citing Corbin the court explained, ''the fact that the parties have left some matters to be determined in the future should not prevent enforcement, if some method of determination independent of the parties' mere 'wish, will, and desire' exists.'' The court determined that the essential terms of the bargain were clear, and therefore concluded that husband's claim lacked merit.

(39) Eckliff v. Walters, 2006 Ohio 4817, 2006 Ohio App. LEXIS 4722(2006) . In June 2003, appellant's husband adopted the minor child, with appellee's written consent. At the time of the adoption, appellee owed $14,861.02 in back child support. The County Department of Jobs and Family Services filed a complaint for child support and reimbursement against appellee for support of the minor child up to the date the adoption was finalized. The trial court found that an oral agreement existed between the parties whereby the appellant waived all child support arrearage in exchange for the appellee signing the consent to adoption. Affirming the decision below, the court of appeals explained that although it is preferable to memorialize a settlement in writing, an oral settlement agreement may be enforceable if there is sufficient particularity to form a binding contract. The court cited Corbin for the proposition that people must be held to the promises they make. The appellee testified that prior to signing the consent to adopt the appellant told him that if he signed it, there would be no back or future child support owed. The trial court was in the best position to determine credibility.

(40) Ohio Turnpike Commission v. Alexanderian, et al., 2006 Ohio 4301 (Ohio 2006) . The Ohio Turnpike Commission (''Turnpike'') brought an action for eminent domain to appropriate real estate owned by Harry and Adele Alexandrian. After lengthy negotiations, the parties entered into a settlement agreement regarding compensation to the Alexandrians for real estate and other related expenses that was accepted by and filed with the court. In return for the clear title to the property, the Turnpike paid a total of $693,780 to the Alexandrians. A deposit of $66,912 was withheld from that amount and deposited with the court clerk for distribution to various defendants, including a previously negotiated amount of $32,960.21 to Wood County for real estate taxes and penalties. Thereafter, the Wood County treasurer filed a motion for payment of an additional amount to Wood County for ''special assessments.'' The treasurer acknowledged that the parties had negotiated a recent agreement during the settlement pre-trial for payment of real estate taxes, interest and delinquencies to be reduced to $32,960.21, but explained that following the entry of settlement, an additional assessment for water and sewer improvements was discovered in the amount of $10,573.21. The Alexandrians argued that they should not be ordered to pay the special assessment charge because it changed the terms upon which the settlement agreement was based. The court noted that ''[a]lthough a unilateral mistake of material fact may provide grounds for rescission of an otherwise valid contract, relief 'will be denied where such mistake is the result of the negligence of the party seeking relief.' '' Citing Corbin, the court held that ''[n]otwithstanding errors and misunderstandings in settlement agreements, 'people must be held to the promises they made.' '' The court determined that the specific amount of taxes to be paid by the Alexandrians was not incorporated into the settlement agreement. Nevertheless, the specific amount of $66,912 was designated as the amount to be withheld for distributions to cover the claims of the various defendants, and it was undisputed that $32,961.21 represented the amount the Alexandrians negotiated and believed would be distributed to settle all claims with Wood County. The court reasoned that since the assessment was paid to Wood County and appeared on its tax records, the county representative should have at least noted that the water and sewer assessment was not included. Further, although the Alexandrians knew of the special assessment, under the circumstances in the case, it was reasonable for them to presume that the negotiations included any amounts owed to Wood County, including the special assessment. Thus, the court concluded that Wood County's failure to include the $10,573.21 owed for the special assessment was a unilateral mistake due to negligence, since all of the records necessary to avoid the mistake or to timely correct it, were at all times in Wood County's possession and control. The court concluded that due to Wood County's unilateral error, the agreed upon amount would not be altered.

(B) The following cases are noteworthy:

(1) Wilson v. Wilson, 46 F.3d 660 (7th Cir. 1995) . The main volume of the treatise discusses United States v. Orr Constr. Co., 560 F.2d 765 (7th Cir. 1977) . Wilson is Orr revisited, with a different result.

In Wilson, a district judge held a pretrial conference to work out a settlement. At the beginning of the conference, the judge announced that the parties had reached a settlement. Neither counsel protested. The judge put on the record its terms. Counsel then engaged in what Judge Manion characterizes as ''some quibbling'' over whether barring the plaintiff from suing again would best be achieved by adopting mutual releases or covenants not to sue. The judge noted that so long as the parties agreed that neither could sue the other, then this aim would be part of their settlement agreement, and left it up to their attorneys to reduce the specifics to writing. He repeated, again without objection, that ''[a]s far as I'm concerned there is an agreement and nothing has to be signed.'' When one attorney asked that the trial date be preserved until completion of the writing, the judge refused.

Naturally, the parties could not produce a writing. Plaintiff moved for enforcement of the agreement that he claimed was reached at the pretrial conference. Defendants eventually joined the motion. The court ordered plaintiff's counsel to prepare and submit a judgment order enforcing the agreement. Defendants' counsel had a change of heart, and moved to strike plaintiff's motion. The defense maintained that the parties had never reached a meeting of the minds over whether they would exchange mutual releases or covenants not to sue, and that there was thus no agreement to enforce. The court disagreed, and entered an order incorporating the terms of the settlement and barring the plaintiff from bringing any other claims arising before the pretrial conference.

Defendants appealed, arguing that even if there had been a meeting of the minds, the fact that the parties never agreed on the legal form of the releases renders the agreement too indefinite to be enforceable. Defendants relied on Orr. The Seventh Circuit decided that Orr does not govern. The agreement in Orr settled a claim arising under federal law, Judge Manion argues, hence the Seventh Circuit used federal law in that case to decide whether the agreement was indefinite. The claim in Wilson arises under Illinois law, hence Illinois law governs.

Under Illinois law, a contract is sufficiently definite if the court is able from its terms and provisions, under proper rules of construction and applicable principles of equity, to ascertain what the parties have agreed to do. Judge Manion concludes that there can be no doubt over what the parties had agreed to do. That the parties did not specify the legal form of plaintiff's promise is, according to Judge Manion, ''of no consequence.'' After the pretrial conference, Judge Manion concludes, the parties had an objective basis for determining when either party had breached.

But did they? The trial judge's order that plaintiff be barred from suing surely accomplished the goal of stopping the plaintiff from suing, but not in the manner a release or a covenant not to sue would have stopped it. Was not the trial judge making a contract for the parties? The rule against indefiniteness is designed to prevent judges from doing just that.

Moreover, if the choice between a release and a covenant not to sue was merely a matter of ''legal form,'' why did the deal fall through over it? (A covenant not to sue may not bind a third party, such as a guardian; a release extinguishes the chose in action.) Judge Manion surmises that the defendants were using the dispute over form as a pretext for getting out of the settlement. Perhaps. (Note, however, that counsel ''quibbled'' about legal form early on, at the pretrial conference.) But shouldn't a party who has not dotted all the i's and crossed all the t's of a settlement agreement be allowed to have a change of heart?

Nevertheless, the result in Wilson seems right, but not the reasoning to reach it. The real difference between Wilson and Orr is not that federal law is different from Illinois law (for all we know it is), but that the parties in Wilson conducted settlement discussions privately, whereas the parties in Orr conducted them on the record, in court. When the trial judge in Orr told the parties they had settled the case (even though they had not reached agreement on the form of the releases), neither party objected. The parties were thus agreeing to let the judge accomplish the releases any way he saw fit. There was no indefiniteness in their agreement, because by failing to object at the pretrial conference the parties were in fact agreeing to whatever the judge decided.

(2) Lo Bosco v. Kure Engineering Ltd., 891 F. Supp. 1020 (D.N.J. 1995) . A putative employment/joint venture agreement provided that plaintiff would work for defendant, his former father-in-law, an investment advisor. Plaintiff was to receive a salary and a fifty percent equity interest in defendant's business investments. Plaintiff claims the agreement was never put in writing because of defendant's cultural bias against written agreements among persons of honor. Plaintiff, in accordance with his part of the bargain, identified a soft drink bottling company as a prime investment and requested that defendant purchase it. Defendant refused and plaintiff brought an action for breach of contract. Defendant moved for summary judgement on the grounds that the terms of the contract were too vague to be enforced. The court denied defendant's motion concluding that, although certain terms of the contract were too indefinite to be given effect as a matter of law, a question of fact existed as to whether the remainder of the contract was too indefinite to be enforced.

(3) Mears v. Nationwide Mut. Ins. Co., 91 F.3d 1118 (8th Cir. 1996) (applying Arkansas law). A contest soliciting a theme for an upcoming convention was distributed to 185 company employees and said ''Here's what you could win: His and Her's Mercedes. An all expense paid trip for two around the world. Additional prize to be announced.'' The offeror used the winner's theme, creating an enforceable bargain for two Mercedes-Benz automobiles. The offer was not too indefinite to be enforced as to which prize or what model of Mercedes he had won. Concerning the prize, there was testimony that the offeror initially informed the winner that he had won two Mercedes-Benz. Concerning the model, there was a minor ambiguity, so the winner was limited to the reasonable interpretation least favorable to him-two new bottom-of-the-line Mercedes-Benz automobiles, not two top-of-the-line models. The case is also noted in § 3.10.

(4) GLS Development, Inc. v. Wal-Mart Stores, Inc., 944 F. Supp. 1384 (N.D. Ill. 1996) (applying Illinois law). Wal-Mart promised GLS: (i) $500,000 if GLS would relinquish contractual rights to build a new Wal-Mart store and (ii) ''a few'' other opportunities if GLS would allow another developer to build the store for Wal-Mart. GLS relinquished its contract rights, but Wal-Mart ultimately refused to pay the $500,000 and provided no other opportunities. The court analyzed these two promises separately, finding that the promise to pay $500,000 was sufficiently definite to furnish a reasonable basis for supplying a remedy even though the date of payment was not expressly stated and the precise identify of the promisor was unstated. The other promise was too indefinite to enforce, however, because, for example, the size and type of development job were not mentioned.

(5) Cragg v. City of Osawatomie, 143 F.3d 1343 (1998) . Cragg, who was the Osawatomie police chief, had a dispute with Shrader, a former city manager, who owned a local insurance agency. Shrader threatened Cragg's continued employment with the city. Cragg complained to the current city manager, Buchanan, who provided Cragg with the following letter:

The intent of this letter is to give you a reasonable quarantee [sic] that I whish [sic] you to stay employeed [sic] with the City of Osawatomie. I realize with the current political situation, you have been threatened and intimidated about your continued employment with the city.

Kansas remains a work at will state under state statue [sic], unless a contract is in place. A city manager still has the right with a contract in place to discharge any employee. If such action occurs without cause or due process, that employee is entitled to all pay and benefits under the terms of the contract.

Apart from his dispute with Shrader, Cragg also engaged in political activity, which led two members of the city council to ask Buchanan twice to fire him. Twice Buchanan refused. When Buchanan was fired, the new city manager fired Cragg. Along with a First Amendment claim, Cragg sued the city for breach of contract. The trial court denied both claims.

On appeal, the Tenth Circuit reversed the trial court's denial of Cragg's First Amendment claim, but affirmed its denial of his breach of contract claim. The letter of intent, said the court, has none of the attributes of a contract. The court reasoned that neither the city nor Cragg is a party to the alleged agreement, that the letter states no consideration, and that Cragg's duties are undefined. The letter contains no offer or acceptance, says the court, nor is there any evidence of a meeting of the minds.

All of these reasons are perfectly specious. The city was a party to the agreement, if Buchanan was its agent. Cragg was a party as its recipient. The letter need state no consideration, so long as consideration is supplied. Cragg's duties are those of a police chief. The letter constitutes an offer of a unilateral contract, which Cragg could accept by continuing employment. Clearly Buchanan's and Cragg's minds met on the one issue Cragg was worried about: Will the city continue to employ him?

Nonetheless, the court is correct that ''the document is merely a memorandum of Mr. Buchanan's unilateral personal intent to retain plaintiff's services during the remainder of Mr. Buchanan's term of office as city manager.'' Go back to the letter. Look at the first sentence: ''The intent of this letter is to give you a reasonable quarantee [sic] that I whish [sic] you to stay employeed [sic] with the City of Osawatomie.'' Buchanan did just that: wish Cragg to stay employed. It wasn't Buchanan who fired him. Contract or no (and why not?), the city never breached its promise.

(6) Dimario v. Coppola, 10 F. Supp. 2d 213 (1998) . Dimario was the trainer of Runaway Groom, a successful race horse. He sued Coppola and Drumlanring Farm, the horse's owners, for breach of an oral employment contract with Coppola, alleging that they owed him ''additional compensation'' of 10% of the earnings derived from the syndication of the horse (10% of the gross proceeds realized from the sale of forty equal shares of the horse), to which he claims successful trainers are traditionally entitled and which, he claims, the owners declared on numerous occasions over an eleven year period. The owners said that the only additional compensation Dimario was owed was one breeding right per year in the stallion, called a ''lifetime breeding right.'' They moved for summary judgment, and Judge Weinstein granted the motion. His opinion addresses two main issues, both under New York law: Was there a binding oral employment agreement? What were its terms?

The owners said that there was no contract, because the parties' minds failed to meet on a material term: the compensation component. Judge Weinstein rejected their contention. But first he resolved whether the parties intended to enter into a binding oral agreement.

New York law uses common law contract principles to determine when parties intend to form a binding agreement. The intent of the parties, which should be determined from the totality of the circumstances, governs. New York law uses a four factor test to scrutinize the objective signs-the words and deeds of the parties-that disclose their intent. New York law asks, first, whether there was an express reservation between the parties not to be bound absent a formal writing; second, whether one party has partially performed the contract; third, whether there are material terms left to be negotiated; and fourth, whether it is the type of agreement that is usually reduced to writing. Judge Weinstein found no express reservation, partial performance by the parties, no missing material terms (so long as one is willing, as Judge Weinstein certainly is, to imply terms from trade practice), and a type of agreement not usually reduced to writing in the business in which the parties were engaged. Hence he concluded that a jury would be required to find a binding agreement ''even though there was no explicit agreement on terms and no execution of a final document satisfactory in every respect to both sides.''

Judge Weinstein then addressed what he described as ''[t]he sole serious issue between the parties'': whether the ambiguous 'additional compensation' makes the agreement unenforceable. He concluded that ''the intricate system of gap fillers in the equine industry more than adequately provide necessary guidance for the construction of the contract's terms.'' Pointing to the ''growing trend in modern contract law in the United States and elsewhere to relax formal requirements for a contract,'' Judge Weinstein sought to construe the compensation requirement reasonably in the context of business and trade expectations. New York, along with most modern legislatures and courts, rejects the tendency of some courts in the past to find many agreements unenforceable due to indefiniteness. Now courts are ''willing to enforce fair contracts 'even when many terms are missing' to reflect the expectations of honest business people.'' Judge Weinstein concluded that ''[t]he intentions of the parties to be bound and the incorporation of the standards and custom of the industry into the agreement by implication provides sufficient basis to ascertain compensation.''

Finally, Judge Weinstein turned to construction of the terms of the agreement. He condemns the sequence of interpretation in what he calls ''the Llewellyian interpretive model''-''the express terms of the contract, followed by plain meaning and only as a last resort turns to external interpretive tools''-as not useful in the ''esoteric world of the Thoroughbred horse racing industry'', where ''the meaning of the terms of the agreement are defined by the customs and norms of the industry.'' In the ''inverted hierarchy of contract interpretation''-a phrase the Judge borrows from Eyal Zamir, The Inverted Hierarchy of Contract Interpretation, 97 COLUM. L. Rev. 1710 (1997)-the path of interpretation is ''broken into steps in which trade usage is central.'' ''The parameters of a contract within the horse industry are gauged by course of performance, course of dealing, and usages of the trade.'' ''The question of additional compensation as defined by standard and custom in the industry,'' Judge Weinstein found, ''was unequivocally answered by both the plaintiff's and defendants' experts as being limited to one lifetime breeding right.'' Hence, he granted the defendants' motion for summary judgment.

Judge Weinstein's decision is problematic both on the facts and on the law. On the facts, Judge Weinstein seems to be ignoring defendants' repeated assurances that plaintiff's additional compensation would be 10% of the earnings flowing from Runaway Groom's syndication. Why should they not be bound by what they said? Judge Weinstein could reasonably ignore these assurances only if he believes that industry custom is somehow dispositive. Say, for example, if the plaintiff must show more than these oral assurances to oust the industry standard. That would not be a totally unreasonable position, derivable from his inverted hierarchy of interpretation. We would then have a judge-made version of the Statute of Frauds. Apart from the fact that the clauses of the Statute of Frauds are legislation and judges should be reluctant to expand an apparently thorough legislative scheme, Judge Weinstein nowhere says that this is what he is doing. The wisdom of doing so is quite another matter. Judge Weinstein needed to have done more than he did to persuade the court of public opinion that custom must always trump oral assurances of a departure from custom.

This case is also noted in § 23.9.

(7) Continental Ins. Co. v. Rutledge & Co., 750 A.2d 1219 (Del. Ch. 2000) (distinguishing indefiniteness of terms that is crucial to determining whether a binding agreement was formed from indefiniteness of terms that is irrelevant to whether an oral modification of a written contract was or was not entered into). This case is also noted in §§ 9.1 and 40.13.

(8) Bergin v. Century 21 Real Estate Corp., 2000 U.S. Dist. LEXIS 2088 (S.D.N.Y. Feb. 23, 2000) (applying New Jersey law). This case is fully discussed in § 5.2 of this supplement.

(9) Hood v. District of Columbia, 211 F. Supp. 2d 176 (D.D.C. 2002) . The plaintiffs, correction officers, were discharged for comments made on television concerning halfway houses. Their action for unjust termination induced settlement discussions. While the parties had arrived at part of an agreement on the payment to the plaintiffs of $625,000, the court found no enforceable agreement concerning re-enrollment in the retirement system. Emphasizing that the court must consider the objective manifestations of the parties to determine questions of mutual assent (Restatement (Second) of Contracts, §§ 22, 23), the court found that the objective acts of the parties indicated that ''they had not come close'' to finalizing the issue or re-enrollment.

(10) Armstrong v. Rohm & Haas Co., 349 F. Supp. 2d 71 (D. Mass. 2004) . The plaintiffs were employed as ceramic grinders for the Morton Company which was sold to the defendant. When the defendant announced the closure of the facility where the plaintiffs worked, the plaintiffs could have transferred to another facility. The defendant's plant manager, however, allegedly suggested that they could earn more by creating their own business since the defendant had been sending its work to a subcontractor with which it would like to end its dependence. The manager stated that the defendant would provide the plaintiffs with ''all the [outsourced grinding] work they could handle.'' In reliance on these statements, the plaintiffs resigned from the defendant, received a severance package and signed releases and covenants not to sue. They created their own business but soon learned that they would not receive all of the work they could handle from the defendant. In their claim for breach of contract, the court relied upon the Restatement, Second, of Contracts, § 33 in determining whether the parties manifested an intention to enter into a contract and whether there was a reasonable basis for a court to afford a remedy for breach. The court concluded that the defendant's alleged promise through the plant manage of all of the work the plaintiff could handle was too vague to afford a basis for providing an appropriate remedy. The alleged promise to provide ''all of the work'' the plaintiffs could ''handle'' left the volume of the work to be performed unclear. The court had no basis for determining the extent of such work. Was it the amount previously outsourced to the subcontractor, the amount the plaintiffs ''wanted to handle,'' or the amount that the plaintiff actually could handle, considering their lack of experience in running their own business? While the suggestion that the plaintiffs could earn more than their former salaries, their net profit would be speculative, particularly in light of a new business. No price for their work had been suggested nor was there any duration to the alleged agreement. While a person of principle will keep his promise, if the promise is sufficiently imprecise, the law will not force him to do so. The plaintiff's claim was dismissed.

(11) Shapnick v. L.C.A.-Vision, Inc., 2005 U.S. Dist. LEXIS 11006 (S. D. Ohio June 7, 2005) . The plaintiff, an ophthalmologist who performed LASIK surgery, was interviewed by the defendant for a new clinic it intended to open in Minnesota as part of its expansion plans. The defendant's recruiter of such surgeons, Finney, informed the plaintiff that he could expect to earn $600,000 to $700,000 annually in the new facility though the plaintiff understood that Finney was not making an offer at that time. After a series of interviews, Finney allegedly called the plaintiff to congratulate him and told him to get ready to move to Minnesota as soon as possible. The plaintiff responded by asking for a written contract. Finney's assistant sent an e-mail to the plaintiff stating, ''We are pleased to offer you a full-time position in our Minnesota market. Steve Finney will have a contract to you before the end of the week.'' The plaintiff resigned his existing position before receiving any contract from Finney. When the contract arrived, the plaintiff responded with nine substantive changes recommend by his attorney. He received no response from the defendant until Finney informed him that the defendant was not going forward with any expansion plans, but the defendant would offer the plaintiff a similar position in Richmond, Virginia, albeit not at the compensation level Finney had mentioned initially. The plaintiff rejected that proposal as well as the defendant's proposal to provide the plaintiff with a right of first refusal for one year should the defendant pursue a Minnesota expansion. The plaintiff brought this action for breach of contract and the defendant moved for summary judgment. The court reviewed the fundamental law of offer and acceptance in deciding the parties had not formed a contract. The plaintiff had not produced evidence of any manifestation of acceptance of any offer. The plaintiff's resignation of his existing position was not an acceptance. Even assuming a resignation could constitute an acceptance, the court found that the plaintiff never communicated this fact to the defendant. Though he alleged that Finney had instructed him to resign his position, countervailing evidence suggested that this had not occurred. The court found that the situation fell squarely within Section 33 of the Restatement (Second) of Contracts dealing with fatal uncertainty of terms. With respect to Finney's oral or e-mail alleged offers, many important terms were unresolved, particularly the compensation term that was important to the plaintiff who was disappointed in his existing position primarily because of his compensation. The duration of the contract, non-salary benefits, or whether the plaintiff would be subject to a covenant not to compete were never discussed. The plaintiff's modification and return of the defendant's written contract proposal was a counteroffer and rejection of the defendant's offer. The defendant never accepted the counteroffer. The court granted the defendant's motion for summary judgment on the plaintiff's breach of contract claims. The plaintiff had also brought an action on the basis of promissory estoppel. While the court viewed that claim as presenting a ''close question,'' it denied the defendant's motion for summary judgment as to that claim.

(12) Ski River Dev. Inc. v. McCalla, 167 S.W.3d 121 (Tex. App. Waco 2005) . The Bakers, mother and son, had a 99-year lease on 380 acres of property owned by Glazier. The Bakers' sublease of two acres of this land to the McCallas contained a provision stating that, in the event the Bakers purchased or otherwise obtained legal ownership of said property and later elect to sell, the Bakers hereby grant to the McCallas an option to purchase all or a portion of said property from the Bakers at market value. Glazier died and left the property to the Bakers. The son deeded his interest to his mother, Mary Baker who then signed a one-year listing agreement with a realtor to sell the entire 380 acres at $2500 per acre. The listing agent notified McCalla that he had 72 hours to exercise his option. McCalla responded that there was no such time limit on his option and it would take time to determine the market value of the property. Two months later, McCalla's appraisal of the property was completed at $1200 per acre, but informed the agent that he would not insist on the sale at that price to allow Baker to receive a higher price. The letter stated that nothing therein waived his rights. A year and a half later, Baker entered into a 99-year lease of property with the Davises who assigned their lease to Ski River. McCalla then offered to purchase the property at $1200 per acre which was rejected. The McCallas filed suit and obtained a judgment for tortious interference with their contract. The court denied a defense motion to declare that the McCalla's option to purchase in their lease with the Bakers was void. Relying on the Restatement (Second) of Contracts, § 33, the court considered whether there was a sufficiently definite basis for a court to afford a remedy, assuming the parties intended to make the option contract While Texas courts prefer to validate transactions rather than void them, where essential terms are missing courts often find nothing more than an agreement to agree. Uncertainty of terms can preclude one remedy and not others. Thus, less certainty is necessary in an action for damages as contrasted with a suit for specific performance. The option clause in the McCallas' lease with the Bakers left numerous issues unresolved such as, What did the parties mean by ''said property,'' the entire 380 acres or only the McCallas' two acres? What did the parties mean by a ''portion'' of the property? Was Baker's listing of the property an ''election to sell'' the property? Was a bona fide offer from a third party buyer necessary to activate the option? What was the method for determining market value? What is the duration of the option? These unresolved issues indicated that the parties were only agreeing to make a future contract. The failure to resolve these material issues made the option void as a matter of law, regardless of any contrary jury findings.

(13) Behrens v. S. P. Construction Co., 2006 N. H. LEXIS 66 . The parties agreed to the purchase and sale of real property for $315,000. The agreement contained a financing provision stating that it was ''contingent upon the [plaintiffs] obtaining financing'' in the amount of $200,000 ''or less.'' An addendum to this provision stated, ''Sellers to provide up to $200,000 in first mortgage financing at the rate of 7% interest for the first seven years.'' A dispute arose concerning the financing provisions and the plaintiffs sought specific performance of the contract. The trial court found the agreement to be ambiguous. After considering parol evidence, the court concluded that the different interpretations provided by the parties were each reasonable. Thus, there was no meeting of the minds on an essential term of the agreement. The court denied the petition for specific performance. On appeal, the plaintiffs made the curious argument that the trial court erred in not finding a contract had been formed before construing the language of the agreement. Citing § 33(1) and comment b of the Restatement (Second) of Contracts, the instant court found no difficulty in the trial court's analysis to determine whether an agreement had been reached or whether it was fatally uncertain or indefinite. The instant court also found that the trial court had used a proper objective standard of interpretation. Though the agreement contained an integration clause, the court noted that an agreement that the parties intend to be integrated does not necessarily render a contract unambiguous. Thus, the trial court quite properly considered parol evidence to ascertain the parties' intended meaning of the language used. That inquiry clearly indicated the failure of the parties'mutual assent to an essential term of the agreement. While the instant court had never precisely defined the meaning of ''essential,'' it considered the definition of courts in other jurisdictions and concluded that a term is ''essential'' if it seriously affects the rights and obligations of the parties. A term dealing with financing up to $200,000 in a contract to buy property for $315,000 was plainly an essential term. The court affirmed the judgment below.

(14) Waldrop v. Shelter Mut. Ins. Co., 2006 Mo. App. LEXIS 486 . The plaintiff was seriously injured while riding as a passenger in a car insured by the defendant. The car was forced off the road by an oncoming vehicle that left the scene. The defendant agreed to pay the limit of uninsured motorist coverage to the plaintiff ($25,000) under a settlement agreement that contained a provision requiring the plaintiff ''to hold for the benefit of [Shelter] all rights, claims and causes of action which [plaintiff] has or may have against anyone other than [Shelter] for such bodily injury, sickness or disease.'' The plaintiff's attorney returned the agreement unsigned after adding language to this provision stating, ''except for any uninsured claim that may be made against American Family Insurance Company'' which was the plaintiff's insurer. The defendant refused to accept this change. The plaintiff brought this action and the trial court granted summary judgment for the defendant. On appeal, the plaintiff argued that the parties had reached an enforceable agreement while the defendant claimed it was unenforceable since there was no ''meeting of the minds.'' Reversing the decision below, the instant court found that the disputed provision contravened Missouri law in attempting to preserve a claim against parties beyond the uninsured motorist who was legally responsible for the accident as contrasted with other parties such as the plaintiff's insurer (American Family Insurance). The plaintiff paid for insurance and was entitled to receive funds for uninsured coverage under that policy. The defendant was entitled to pursue the tortfeasor absent any subrogation clause in the contract since such subrogation is statutorily recognized in Missouri. The defendant, however, was not entitled to demand subrogation against the plaintiff's insurer. In accordance with Missouri precedent, the court concluded that the defendant ''should not be able to use [the disputed provision] to argue that a meeting of the minds did not occur as to the essential terms of the contract.'' In support of this conclusion, the court relied on § 33, cmt. a. of the Restatement (Second) of Contracts that allows an enforceable contract to be recognized where the parties have intended to conclude a bargain but there is uncertainty about ''incidental or collateral'' matters. Since the defendant's subrogation rights were provided by statute, the court saw no difficulty in enforcing the settlement agreement with a clause created by the court. As the facts were reported by the court, when the plaintiff rejected the defendant's settlement offer by refusing to sign it absent a change in the disputed provision, the plaintiff did not accept the defendant's offer. Rather it made a counter offer which the defendant refused to accept. The court, however, found a formed contract resulting from a singular kind of reformation that did not state the intention of the parties, but stated an intention in accordance with the wishes of the plaintiff and statutory law. It is one thing to hold that the subrogation clause sought by the defendant was against the public policy of Missouri and could not be enforced. It is quite another to hold that a party is bound to a contract it did not intend to make. As to the application of § 33 of the Restatement (Second) of Contracts, there were no missing or uncertain terms. The defendant's proposed subrogation clause was clear, certain and unenforceable. The plaintiff may very well have been entitled to the $25,000 of uninsured motorist coverage under the defendant's policy, but recovery under an offer and counter offer, neither of which were accepted, is inexplicable.

(15) Spinal Concepts v. Curasan, 2006 U.S. Dist. LEXIS 63987 (N. D. Tex. 2006) . In 2003, Curasan entered into a five year exclusive dealing contract granting Spinal Concepts (Spinal) a five-year exclusive right to distribute Curasan's product Cerasorb used in the regeneration of human bone. The agreement established purchase minimums for the first two years, but the parties agreed to negotiate ''quotas'' for the remaining three years of the contract. The agreement also required Spinal to provide quarterly sales forecasts to Curasan and Spinal would be required to take at least 80% of the first forecasted quarter in subsequent quarters. Spinal met its obligations for the first year but not for the second year of the contract. It did not order any Cerasorb for the final three years. An arbitrator found that the absence of quotas (and, therefore, a quantity term) for the last three years of the contract did not make the contract for those years fatally indefinite. Rather, the arbitrator found that the parties intended to have a contract and there was a reasonably certain basis for affording a remedy pursuant to the Uniform Commercial Code, § 2-204(3) in the provision of quarterly reports requiring Spinal to take no less than 80% of the first forecasted quarter which, the arbitrator found, was the first quarter of the first year of the contract, 2003. The court disagreed with this analysis on the footing that if Spinal simply agreed to buy a minimum of 80% of that first quarter 2003 forecast, there would be no need for quarterly forecasts thereafter. Rather, the court found that the ''first quarter'' was not static. New forecasts were required each year. The court held that the contract was sufficiently definite for 2004 to allow Cuarasan to recover its lost profits for that year, but the parties left to negotiation the determination of new quotas thereafter. Curasan terminated the contract in 2005. Thus, the court held that there was no way the arbitrator or the court could determine damages with reasonable certainty for the last three years of the contract in the absence of the quantity term.

(16) Association Benefit Services, Inc. v. Caremark Rx, Inc., 2007 U. S. App. LEXIS 16750 (7th Cir. 2007) . The plaintiff proposed an opportunity for the defendant to become a pharmacy benefits manager of a plan to be offered to the American Automobile Association (AAA). On the day of a scheduled meeting with AAA, the plaintiff required a document from the defendant concerning the plaintiff's compensation. The hurried May 19th letter was a modification of an original letter from the defendant indicating its intent to work with the plaintiff concerning the AAA opportunity. The modification stated that the defendant ''will be paying commissions'' to the plaintiff of $0.25 per retail claim and $1.50 per mail order claim. The letter contained no statement of the plaintiff's obligations. The parties understood that these payments would be made only if the defendant's arrangement with AAA was consummated. The meeting with AAA occurred leading to further negotiations during which there were discussions between the plaintiff and defendant concerning decreased commission levels. When the defendant achieved an agreement with AAA, it offered the plaintiff $0.025 commissions which the plaintiff rejected and brought this action for breach of contract. The district court entered summary judgment for the defendant. On appeal, the instant court reviewed the May 19th letter to determine whether it was sufficient evidence of a contract or even an offer. Quoting from § 33(1) of the Restatement (Second) of Contracts, the court recognized that even where an offer is intended, it cannot be accepted to form a contract unless the terms are reasonably certain. The court explained that the ''definite and certain terms'' requirement serves the overriding purpose of not only ensuring that the parties have, in fact, made an agreement, but that the court has a sufficient basis to enforce obligations that the parties have sought to impose on each other. The court noted three separate places in the plaintiff's opening brief characterized the alleged contract with the defendant as one in which the plaintiff had obligations beyond a mere business introduction. At oral argument, however, the plaintiff's counsel insisted that its only obligation was one of business introduction. Even where the agreement sets forth some terms in detail, if an essential term is missing, the agreement is fatally indefinite (citing Academy Chicago Publishers v. Cheever, 578 N. E. 2d 981 (Ill.1991) . Thus, the plaintiff's own argument revealed fatal uncertainty concerning its obligations under the contract. While it is not uncommon for a court to supply a missing term, where there is no standard for reasonable implication, courts ordinarily refuse to supply such a term. The judgment of the district court was affirmed.

(17) Lambert v. Fleet National Bank, 449 Mass. 119, 865 N. E.2d 1091 (2007) . The plaintiff obtained a five-year commercial mortgage loan in the amount of $500,000 from the bank which agreed to renegotiate the mortgage loan every five years so long as the mortgagor was not in default. Five years later, the bank rolled over the mortgage into a new loan and mortgage. During the next several years, the plaintiff fell behind on mortgage payments as well as taxes and bills on the property. The bank, therefore, refused to roll the mortgage over into a new loan at the end of the third five years. The plaintiff claimed the bank breached the contract by refusing to renew the mortgage. The trial court granted summary judgment for the bank which was affirmed by the court of appeals. On appeal, the instant court noted that he original commitment of the bank was to renegotiate (as contrasted with renew) the mortgage and loan at the end of five years if there had been no default. The court the fundamental principle that an enforceable contract requires the parties' agreement on material terms While some lack of precision is tolerable, the plaintiff relied on conversation with two bank loan officers which manifested nothing more than expectations and future negotiations. Assuming the plaintiff's claim that one of the bank officers stated that ''he was going to do everything he could to cooperate''with the plaintiff, there was no discussion of what ''cooperation'' meant and, as § 33, comment c of the Restatement (Second) of Contracts indicates, the more terms the parties leave open, the less likely it is that they intend to conclude a binding agreement, Affirming the judgment below, the court found it ''inconceivable'' that a major modification of a large commercial loan would be made informally and in general terms as contrasted with a detailed written agreement.

Supplement to Notes in Main Volume

2. This section is cited in Lawrence v. Jones, 124 Idaho 748, 864 P.2d 194 (App. 1993) (terms of security provision in purchase and loan agreement that were essential to agreement were not sufficiently definite and certain to enable a court to determine what the provision entailed, rendering the entire agreement unenforceable).

MD- Maslow v. Vanguri, 168 Md. App. 298, 896 A. 2d 408 (2006) quotes this sentence from the main volume. This case is discussed at § 36.7(B).

R.I.- Acinapura v. Natalizia, 2003 R.I. Super. LEXIS 98 (R.I. Super. Ct. July 30, 2003) . The plaintiff sold a controlling interest in certain publications to the defendants under an agreement which the defendants allegedly breached. The plaintiff claimed partnership status under the agreement, but the language of the agreement was patently ambiguous. Quoting Corbin, the court held that vagueness of expression, indefiniteness, and uncertainty as to the essential terms rendered the contract unenforceable. Absent reasonably certain terms, the court had no basis for affording a remedy. The court held that the plaintiff failed to demonstrate an enforceable contract by a preponderance of the evidence.

This case is also cited at §§ 4.7 and 4.13.

S.D.- Werner v. Norwest Bank of S.D., 499 N.W.2d 138 (S.D. 1993) (would-be borrower asserting oral promise to loan money could not withstand summary judgment motion where terms of alleged promise did not specify the amount of the loan or the interest rate; a dissenting judge argued that the defendant failed to sustain its burden to show the absence of genuine issues of material fact).

5. Visiting Nurse Ass'n, St. Louis v. VNAHealthcare, Inc., 347 F.3d 1052 (8th Cir. 2003) . The plaintiff (VNASL) brought an action against the defendant (VNAH) for trade name infringement. The district court denied relief on the ground that the name was generic. Prior to this ruling, however, the court had refused the plaintiff's request to enforce an oral settlement agreement on the ground that the agreement did not evidence a ''meeting of the minds.'' The instant court reversed. After lamenting the continuation of the confusing phrase ''meeting of the minds,'' which could create the impression that the parties to an agreement must entertain the same subjective views, the court found that the parties' objective manifestations of assent were sufficiently clear and definite to enforce and to allow an appropriate remedy. The district court had found fatal ambiguity in a provision of the oral agreement that required the defendant to disclaim any connection with the plaintiff within the plaintiff's trade area. The court found no ambiguity in this provision. The agreement clearly covered the defendant's stationery and other printed materials. Though it did not deal with the precise fate of the defendant's website, the instant court found that this was an ancillary matter that could be resolved by a construction of the term, ''promotional materials used within the Trade Area.'' This case is also discussed at § 19.3 of the supplement.

19. U.S.- In re Windsor Plumbing Supply Co., 170 B.R. 503 (Bankr. E.D.N.Y. 1994) . A consignment agreement omitted names and addresses to which notices were to be directed, together with an Exhibit A (detailing all products the consignor manufactured), and an Exhibit B (trademarks, trade names, and patents included in the agreement). The court held that these omissions were not essential to the creation of a contractual relationship. The contract was not void for indefiniteness.

The court noted that although these items may be material, a court could easily have filled in the gaps. The information that was to be contained in the exhibits, while not set forth, is readily available, and notice could properly have been directed to any corporate officer, despite the absence of names and addresses. This case is also noted in § 2.2.

S.D.- Matter of Estate of Eberle, 505 N.W.2d 767 (S.D. 1993) (in-court stipulation settling major terms of probate dispute ''was sufficiently definite to enable the court to give it an exact meaning'' and ''[m]inor points implementing the agreement, though not listed, can be implied as necessary to carry out the terms of the agreement'').

22. Andrus v. DOT, 2005 Wash. App. LEXIS 1977 (Aug. 9, 2005) . The plaintiff applied for a position as a building inspector in the City of Olympia. A City supervisor called the plaintiff and said, ''You're our number one choice and I'm offering you the job.'' The plaintiff replied, ''Great'' and ''Yes,'' requesting the supervisor to fax the details of the job including salary, duties, starting date, retirement benefits and potential labor union membership. After further reference checks, the supervisor informed the plaintiff that he would not be hired. The plaintiff had not relied on the offer. The plaintiff sued for breach of contract and the district court granted summary judgment for the defendant. Citing § 33 of the Restatement (Second) of Contracts, the instant court affirmed the judgment on the footing that the number of missing terms and the understanding that the call was to be followed by a written offer and request for acceptance of the terms that would be set forth in the writing demonstrated that the parties did not intend to be bound by the telephone discussion. The court added that, even if a contract had been formed, the plaintiff admitted that the position was terminable-at-will under which there could be no actionable breach in the absence of a contractual modification of the at-will relationship or a firing that contravenes public policy or a legislative enactment.

30. Cal.- Ladas v. California State Auto. Ass'n, 19 Cal. App. 4th 761, 23 Cal. Rptr. 2d 810 (1993) (''promises by an employer to pay 'parity' or 'according to industry standards' are not sufficiently definite to be enforceable'').

42. Ga.- McLean v. Continental Wingate Co., 212 Ga. App. 356, 442 S.E.2d 276 (1994) . Wingate terminated McLean's employment. McLean sued for breach. McLean's compensation package gave him a salary and a percentage of profits (''net proceeds'') earned by Wingate. Wingate claimed that the compensation agreement was too vague to be enforceable because it did not contain a formula for the calculation of the profits to which McLean was entitled. The court held that the agreement was not vague, because the parties, based upon their past dealings, understood the meaning of the term ''net proceeds,'' and the method of establishing the percentage of profits due for his services.

43. Fla.- Kantner v. Boutin, 624 So. 2d 779 (Fla. App. 1993) (''there must be some expression in the incorporating document ... of an intention to be bound by the collateral document'').

46. Cytogenix, Inc. v. Waldroff, 2006 Tex. App. LEXIS 10661 . Where a trial court entered a permanent injunction requiring specific performance of a licensing agreement, the court of appeals noted that the agreement contained no duration term. Though it recognized the general rule that an otherwise enforceable contract without a duration term can be enforced by the implication of a reasonable time, to support specific performance via injunctive relief, a contract must have precise terms capable of enforcement. Even if the absence of a duration term is not enough to deny enforcement entirely, the court held that it is enough to preclude specific performance by permanent injunction. The contract did not provide that the parties contemplated perpetual duration and, therefore, it did not support perpetual injunctive enforcement.