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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 § 4.3

Supp. to § 4.3 Indefiniteness of Price or Terms of Payment-Money as a Commodity

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(A) The following cases cite this section or its predecessor, § 97:

(1) Richard Barton Enters., Inc. v. Tsern, 928 P.2d 368 (Utah 1996) . Parties to a lease calling for the landlord to make certain repairs which it did not do thereafter ''agreed to the concept of a rent credit,'' never specifying how much it would be or how it would be paid. Citing this section of Corbin, the court reversed a lower court ruling and refused to enforce the rent abatement agreement, saying ''when parties have not agreed on a reasonable price or a method for determining one, 'the agreement is too indefinite and uncertain for enforcement.' '' The court also cited § 686 of Corbin (now § 33A.13), ''Conditions Precedent With Respect to Leasing Contracts,'' where this case is also noted.

(2) Nunley v. Westates Casing Servs., Inc., 1999 UT 100, 989 P.2d 1077 (1999) . The two shareholders of Westates, Nunley and McFarland, wished to negotiate a redistribution of shares in proportion to their initial capital contributions or create a means by which the lesser contributor (Nunley) could repay the greater (McFarland) for his disproportionate initial contribution. Nunley thought they had reached oral agreement at a special meeting of the board of directors for McFarland to give Nunley an option to purchase 49% of the shares, together with an option to purchase an extra 2% should McFarland die or retire; McFarland thought not. The sticking point, according to McFarland, was the 2%, which Nunley wanted and without which he was unwilling to purchase the 49%. They simply could not agree, he said, ''on the critical issue on how and when and on what terms'' the 2% option could be exercised. Upon suit by Nunley for enforcement of an agreement to purchase the 49%, the trial court agreed with McFarland (in a bench trial) that Nunley was unwilling to agree to the 49% option without agreement on the 2% option, and that the parties were unable to reach agreement on the 2% option. On appeal, the Supreme Court of Utah affirmed. This case is also noted in § 2.1 of this supplement.

(3) In re Annicott Excellence, LLC, 259 B.R. 782 (Bankr. M.D. Fla. 2001) (applying Florida law). A debtor hired the petitioner to maintain a trailer park. In an effort to combat rising lake water that threatened the park, the petitioner rented and manned a pump. The petitioner spoke to the debtor's vice president, who agreed to pay for extra costs in using the pump. The petitioner filed a claim against the debtor for those costs. The court found that the vice president had the authority to bind the debtor and that the petitioner had detrimentally relied upon the debtor's representation of authority in undertaking the pumping of floodwater and the building of a wall. The court substituted a per-hour reasonable compensation in place of $.25 per gallon, since there was insufficient evidence that the vice president's statement that the petitioner should do whatever it takes constituted assent to such payment. Citing this section of Corbin, the court held that ''a compensation term may be left open if the parties agree upon a practicable method of computing compensation in the future or specify that a 'reasonable' amount will be paid. See May v. Sessums & Mason, P.A., 700 So. 2d 22, 26-27 (Fla. 2d Dist. Ct. App. 1997) (quoting Corbin on Contracts, 1 Corbin on Contracts § 4.3 at 567 (Joseph M. Perillo, Rev. ed. 1993)).''

(4) Doe v. HCA Health Servs. of Tenn., Inc., 46 S.W.3d 191 (Tenn. 2001) . The plaintiff was admitted to the defendant's hospital for a surgical procedure. Upon admission, the plaintiff signed an assignment of benefits which authorized her insurance company to pay benefits directly to the hospital and which stated that she would be financially responsible for charges not covered. After her hospitalization, her insurance company paid eighty percent of their approved allowances, and the plaintiff was billed for the remainder. The plaintiff refused to pay and the bill was submitted to a collection agency. During the collection process, the plaintiffs sued the hospital seeking a declaratory judgment that the hospital had breached its contract by demanding unreasonable charges for its goods and services. The hospital counterclaimed for the balance owed on the bill. The plaintiffs argued that since the bill was left open, the Assignment of Benefits was not sufficiently definite to constitute a valid contractual agreement. The hospital argued that because the Assignment of Benefits did not specify an exact price, but referred to the hospital's Charge Master, a confidential list of charges by which the fee would be determined, the Assignment of Benefits was thus sufficiently definite, since the fees could be quantified by reference to this external document. The trial court denied the hospital's motion for summary judgment, finding issues of material fact. The court of appeals found the contract to be indefinite because the promise in the contract to pay ''charges'' contained no ''reference to any 'document, transaction or other extrinsic fact' to which reference could be made to ascertain the amount [the patient] promised to pay.'' The supreme court held that although certainty with respect to a promise does not have to be readily apparent as long as it contains a reference to some document, transaction, or other extrinsic facts from which its meaning may be made clear (citing Williston on Contracts, § 4:27, at 593 (4th ed. 1990)), here the Agreement did not contain any reference to the Charge Master. Therefore, the price term in the agreement between the parties was held to be indefinite and unenforceable.

This section of Corbin was cited for the principle that where it is clear that the parties have not expressly or implicitly agreed upon a ''reasonable price,'' and also have not prescribed a practicable method of determination, the agreement is too indefinite and uncertain for enforcement.

(5) Pack v. Case, 30 P.3d 436, 2001 UT App. 232 (Ct. App. 2001) . Pack, a homeowner, entered into a contract with Case to install a new roof on his home. Pack was having other renovations performed upon his home as well. The agreement stipulated that roofing, labor, and materials would cost $2.25 per square foot, and it estimated that the roof would cover 4,000 square feet. Pack issued payment of $4,500, or half of the estimated cost of the job, at the commencement of the job, the remainder to be paid at the completion of the job, at which time a measurement of the roof's actual square footage would determine the balance owed to Case. During the course of the job, other contractors damaged a portion of the newly installed roof, and although Pack authorized Case to perform the necessary repairs, the parties did not agree on a price for the extra work. At the completion of the job, the parties disagreed as to the square footage of the job as well as the price to be paid for the extra work. Pack refused to pay the full amount that Case claimed was owed. Further, the roof developed leaks and Case refused to return and repair the roof. Both parties sued, with Pack alleging breach of contract, negligence, and breach of warranty. The trial court concluded that Case had improperly installed the roof and that Pack's failure to pay the complete amount did not void the contractual warranty. The court ordered Case to pay Pack for the cost of having a new roof installed, plus attorney's fees, with the award offset by the remainder of the money owed by Pack to Case, including $3200 for the extra work performed.

The Utah Court of Appeals held that Pack's failure to pay the $675 remaining on the roofing contract did not relieve Case from his obligations to perform under the contract. With regard to the agreement for the extra work, the court noted that ''when parties have not agreed on a reasonable price or a method for determining one, the agreement is too indefinite and uncertain for enforcement.'' Richard Barton Enters., Inc. v. Tsern, 928 P.2d 368, 373 (Utah 1996) , citing this section of Corbin. Since the agreement for the extra work fell into this ''indefinite and uncertain'' category, the court did not consider it in its opinion. The court applied the following test ''to determine whether a failure was material, thus relieving the non-failing party of its duty to continue to perform under the contract: (a) the extent to which the injured party will be deprived of the benefit which he reasonably expected; (b) the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived; (c) the extent to which the party failing to perform or to offer to perform will suffer forfeiture; (d) the likelihood that the party failing to perform or to offer to perform will cure his failure, taking account of all the circumstances including any reasonable assurances; and (e) the extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing. Cache County v. Beus, 1999 UT App 134 , P 37, 978 P.2d 1043 (quoting Restatement (Second) of Contracts § 241 (1981)).'' Applying to the instant case, the court found that Pack's failure to pay the disputed sum of $675.00 was not a material failure, and Case was not excused from performing under the warranty.

On the issue of whether Pack's attempt to perform some repairs upon the leaking roof voided the contractor's warranty, the court held that it was a valid attempt to mitigate damages and did not void the warranty.

(6) Kosoy v. Kieselstein-Cord, 2002 U.S. Dist. LEXIS 224 (S.D.N.Y. Jan. 9, 2002) . An LLC operated a boutique merchandising the fashions of the defendant. Each of the three members of the LLC had the right at any time to buy the interest of another member or to sell his or her membership interest to another member (''buy-sell'' rights). When a member (McCann) notified the other two members that he would exercise his buy-sell rights, one of the remaining members, David Kosoy, notified the defendant who allegedly emphasized the importance of Kosoy's continued involvement in the LLC and promised that if Kosoy purchased McCann's rights, the defendant would repurchase that interest from Kosoy and thereafter assume responsibility for managing the boutique. Kosoy arranged to have McCann assign his rights to Charger, another LLC wholly owned by Kosoy, for a payment by Charger to McCann of $150,000. In an action to enforce the alleged agreement with the defendant, the court held that the alleged agreement was no more than a promise by the defendant to purchase what had been McCann's interest at an unspecified time in an unspecified manner for an unspecified price. The court quoted Corbin at § 4.3 in support of its holding that where the parties fail to expressly or implicitly agree upon a ''reasonable price'' or a practicable method for determining price, the agreement is too uncertain for enforcement. Had the parties agreed upon a ''reasonable price'' or a price to be determined after Kosoy negotiated the transfer from McCann, the alleged agreement may not have been fatally indefinite. The court could not fill the missing price term by the amount paid to McCann ($150,000) since any such implication would be speculative. The parties never agreed upon that figure or any other amount. Moreover, the defendant had allegedly agreed to assume management of the boutique and there is no indication as to the effect of this additional performance on price. The court dismissed the breach of contract claim allowing the sole remaining claim alleged by the plaintiff in an action based on promissory estoppel.

(7) Moody v. Lea, 2001 Tenn. App. LEXIS 838 (Tenn. App. Nov. 7, 2001) . The defendant, a manager of the plaintiff's farm partnership, agreed to pay to the partnership overhead and equipment fees relating to farming activities that he was undertaking for his own benefit while he continued to work for the partnership. The partnership equipment would be appraised and the market value would be divided by five years. The annual cost of the equipment would be divided over all farmed acres to determine the per-acre cost of the equipment. Overhead costs would be determined by dividing the total number of acres farmed by the parties to arrive at a per-acre overhead cost and the defendant would be charged for the acres farmed for his own benefit. The defendant's land was flooded, and this flooding precluded the growing of cotton on the land. The substitute soybean crop provided considerably less income. The defendant claimed that his agreement with the plaintiff was fatally indefinite. The court disagreed, relying on Corbin at § 4.3: if the parties provide a practicable method for determining the price, there is no indefiniteness or uncertainty that will prevent the agreement from becoming an enforceable contract.

(8) North Star Steel Co. v. United States, 58 Fed. Cl. 720 (2003) . The defendant power administration's contract to furnish to the plaintiff steel company electric power transmission and ancillary services provided that after one year of operation at the plaintiff's steel plant, the current pricing formula would be replaced with ''an appropriate cost-based methodology to review, evaluate and periodically, if necessary, adjust the percentage associated with the'' current payment structure. The court rejected the argument that the contract could not be enforced because it lacked certainty. The court determined that the contract created an implied obligation to negotiate in good faith and, therefore, was sufficiently definite to be enforced. The court relied on Corbin's view that courts should be slow to deny enforcement of a contract based on indefiniteness. An agreement specifying that certain terms will be agreed upon by future negotiation is sufficiently definite because it impliedly places an obligation on the parties to negotiate in good faith. Thus, the Federal Circuit has found that the obligation to negotiate in good faith gives the contract sufficient certainty by allowing courts to determine whether a breach has occurred by determining whether the parties have negotiated in good faith. The court concluded that the contract before it was sufficiently definite to allow the court to ascertain whether and when a breach has occurred and what remedies, if any, were appropriate.

(9) Herder Hallmark Consultants, Inc. v. Regnier Consulting Group, Inc., 685 N.W.2d 564 (Wis. Ct. App. 2004) . Herder, the owner of an actuarial firm, decided to sell his business and entered into negotiations with one of his actuaries, Regnier. Regnier sent out notices to the firm's clients about a change in management of the firm, formed Regnier, Inc., hired Herder's employees, took most of Herder's files and customer lists, used Herder's computers, furniture, and trade secrets, and rented and occupied the same location as Herder. The parties had not, however, reached an agreement as to the purchase price of Herder's assets. Herder argued that a valid contract existed to sell the firm's assets at a fair price. Regnier, on the other hand, argued that no contract existed due to indefiniteness. The court of appeals affirmed the trial court's grant of summary judgment in favor of Herder in finding an enforceable contract. The court stated that ''Wisconsin's approach to contract formation accords with Corbin on Contracts'' where certain terms are left to future negotiations between the parties. Quoting Corbin, the court stated that cases where it is clear that the parties have not expressly or implicitly agreed upon a reasonable price and have not prescribed a practical method of determination are too uncertain for enforcement. Such cases, however, should be rare. This is particularly true where the agreement is a commercial one where it can be presumed that the parties intend a market price or other reasonable price. The court found that the parties indeed had an enforceable agreement due to their conduct, particularly Regnier's in running Herder's business, and that no evidence was submitted rebutting the presumption that a ''reasonable price'' had been agreed upon by the parties.

(10) Prince, Yeates & Geldzahler v. Young, 94 P.3d 179 (Utah 2004) , reh'g denied, 2004 Utah LEXIS 132 (Utah May 24, 2004) . When the Prince, Yeates law firm hired Young as an associate attorney, its representatives advised him that as a general rule, the firm's attorneys typically received increases in compensation based on performance. No agreement was reduced to writing, but Young claimed that the representations created an express agreement pursuant to which Prince, Yeates agreed to pay him additional compensation contingent upon positive performance. Young argued that his recovery of a sizable contingent fee settlement constituted contractual performance sufficient to warrant increased remuneration pursuant to the alleged express agreement. The court disagreed. At no point in Young's discussions with the law firm regarding possible increases in compensation did the law firm represent to Young that it would pay him a specific amount of additional compensation in the future. Without some definite language addressing the amount, timing or conditions of Young's potential additional compensation, the firm's comments represented ''only the facade of a promise ... that the person making [them] commits himself to nothing.'' There was nothing more than ''some nebulous notion in the air that a contract might be entered into in the future,'' but ''the court cannot fabricate the kind of a contract the parties ought to have made and enforce it.'' Thus, there was no express contract binding the law firm to pay Young greater compensation. Young also claimed that he and the law firm entered into a second express contract during the time that Young was handling a contingent fee lawsuit on behalf of the firm. The firm's representatives expressed the firm's intention to be ''fair'' in negotiating the amount of ''fair and equitable'' compensation that Young would receive upon the receipt of the contingent fee award. Again, the court concluded that the firm's statements regarding an anticipated ''fair and equitable'' division of the contingent fee award were too indefinite to create an express contract. The court noted that Young had expressly rejected an offer that the firm retain two thirds and that he retain one third of the contingent fee award, and the parties never agreed upon the specific amount of, or formula to determine, Young's share of the contingent fee award. Citing Corbin, the court held that since the parties had not agreed upon a reasonable price or method for determining one, the agreement was too indefinite to be enforced.

(11) Gardiner, Kamya & Assocs., P.C. v. Jackson, 369 F.3d 1318 (Fed. Cir. 2004) . The appellant, GKA, contracted with the Department of Housing and Urban Development (HUD) to provide a broad range of services including a review and analysis of mortgage insurance claims. Under this indefinite delivery and indefinite quantity agreement, the work was to be performed pursuant to individual task orders under which the payment for services would be negotiated separately. When certain task orders (13 and 14) were about to expire, the parties entered into an agreement for a six-month extension (the modification) that HUD desired to avoid any interruption in services as HUD prepared to enter a new omnibus contract. GKA had sought a price increase under task orders 13 and 14 that was denied, but an audit was to be conducted to compensate GKA in accordance with the results of the audit. No audit was conducted. While the modification did not contain a price increase, it provided for another audit and the parties agreed to negotiate a price adjustment if the audit so recommended. GKA claimed that the parties agreed that any price increase based upon audit results would apply not only to the modified work but to the work under orders 13 and 14 already completed. An audit was completed resulting in higher prices for the modified work. HUD, however, refused to compensate GKA retroactively at higher rates for the work already performed under orders 13 and 14. Upon denial of its claim by the Board of Contract Appeals, GKA appealed. The Board held that the parties' agreement lacked mutual assent concerning the repricing structure. The instant court quoted the predecessor section of Corbin to the effect that an agreement specifying certain terms to be agreed upon by future negotiation is sufficiently definite because it impliedly places an obligation on both parties to negotiate such terms in good faith. Thus, an agreement to negotiate a future price term in good faith manifests mutual assent if the parties intend to be bound. The court also rejected the Board's holding that any alleged promise by HUD to reprice already completed work would be unenforceable for lack of consideration since GKA was under no obligation to agree to a modification. GKA agreed to the modification only on the condition of good faith negotiations of new prices, both prospective and retroactive, if an audit recommended repricing. The court reversed the decision of the Board and remanded the case for further consideration.

(12) Metropolitan Ventures, LLC. v. GEA Associates, 688 N.W.2d 722, 2004 WI App. 189, 2004 Wisc. App. LEXIS 736 (2004) , Petition for Review granted in Metropolitan Ventures v. GEA Associates, 2004 Wisc. LEXIS 1029 (2004) . Metropolitan and GEA Associates executed a limited partnership purchase agreement whereby Metropolitan would purchase GEA Associates, a business engaged in owning and operating a building and a parking garage. The purchase agreement contained a base price of $3,300,000 that could be adjusted through a determination of the net book value of the partnership as of the date of closing. It also included a financing contingency which stated that buyer was to obtain unconditional financing in an amount equal to 85 percent of the purchase price from a reputable Lender on terms satisfactory to the buyer and an appraisal which is satisfactory to the buyer in the buyer's sole discretion. No term or rate of financing was set forth. Both parties proceeded as if the Purchase Agreement constituted a valid contract. When GEA subsequently received a better offer from a purchaser willing to pay more, however, GEA attempted to terminate its contract with Metropolitan. GEA argued that the financing terms were indefinite and vague, and therefore, rendered the Purchase Agreement void. The court disagreed, citing Corbin for the proposition that when a contractual term is indefinite, the contract will not be void for indefiniteness so long as the parties provide a practicable method for determining what the indefinite term will be, or implicitly agree upon a reasonable definition of the term. The court found that the evidence demonstrated the parties' intent to enter into a contract. They agreed to the relatively indefinite language of the financing contingency because this was customary practice, given the distinct characteristics of the sale of a business as contrasted with a sale of real estate. The financing clause at issue set forth the percentage of the purchase price to be financed. Further, the agreement set forth a practicable method to determine the sale price. The fact that the financing clause at issue did not specify a particular term or rate of financing does not render the contract illusory. Financing terms could vary greatly over the course of a short period of time and, thus, inserting such terms into the contract would require speculation. In addition, the conduct of the parties cured any indefiniteness as to the financing contingency. The conduct evidenced that, after the agreement was executed, the parties proceeded to perform. The Court found it significant that up until the time GEA received a better offer, both parties operated as if the Purchase Agreement constituted a valid contract.

(13) Vatt v. James, 2005 Tenn. App. LEXIS 120 (Feb. 28, 2005) . The Vatts contracted to purchase a house built by James for a price of $360,000. The contract included a clause requiring any modification to be evidenced by a writing before any such change would be implemented. At the closing, James claimed that he was owed additional amounts for modifications made at the Vatt's request that were not evidenced in writing. The closing failed and the Vatts brought an action for the return of their earnest payment and other expenditures. The trial court referred the case to the clerk and master of the court who reported that a number of valuable modifications had been made and the parties had waived the writing requirement for such modifications. The report concluded that, since the Vatts had ''approved'' the modifications, they breached their agreement by refusing to pay for them at the closing. The trial court approved the report with certain exceptions. Both parties appealed. The instant court recognized the importance of clauses precluding oral modifications, but it also recognized that such clauses may be waived. The court reviewed each of the ten changes for which the builder, Mr. James, had demanded additional payment. Citing Corbin, the court recognized that certainty with respect to promises does not have to be apparent from the promise itself, so long as there is a reference to extrinsic facts that allow its meaning to be made clear. In each of the ten alleged modifications, the court could discern no mutual assent on a reasonable price for any of the modifications, either express or implied, or evidence to allow a practicable determination of price. The court, therefore, held that an agreement alleged by James that the Vatts agreed to pay for these changes above the original contract price was unenforceable. Moreover, the court held that James materially breached the contract by refusing to sell the house at the original contract price of $360,000. The judgment below was reversed.

(14) Hackberry Creek Country Club, Inc. v. Hackberry Creek Homeowners Association, 205 S.W. 3d 46 (2006) . The court cited Corbin's proposition that a contract may be enforced ''although the performance of one of the parties is to be measured by a standard of reasonableness, if the contract expressly so provides, and that this principle applies to the matter of monetary compensation when the parties have agreed to be bound by that standard.''

(15) Real Estate World Florida Commercial, Inc. v. Gurkin, et al., 943 So.2d 270, 2006 Fla. App. LEXIS 19587 (Fla. 2006) . Plaintiff, a real estate brokerage firm, asserted that one of its agents, Chemaissem, entered into an oral brokerage agreement with the Gurkins for the sale of two commercial properties owned by the Gurkins. Chemaissem followed the conversation with a letter stating the agreed upon terms including a six percent commission to be paid if the broker produced a buyer ''ready, willing and able to purchase the identified properties for $4,000,000 all cash or with new financing.'' Alternatively, if an agreement was reached to sell the properties to a buyer at a different price, the commission agreement would be six percent of such other price. The trial court entered summary judgment in favor of the Gurkins, finding that the agreement was too vague and indefinite since the sale price was subject to negotiation between the Gurkins and any buyer, the commission amount would vary according to the sales price, and it would be too indefinite an amount to enforce. The appellate court disagreed. Citing Corbin, the appellate court explained that ''[i]f the parties provide a practical method for determining compensation there is no indefiniteness or uncertainty that will prevent the agreement from being an enforceable contract.'' Since the agreement provided for a six percent commission, the appellate court determined that the agreement was sufficiently definite to be enforced.

(16) Huber v. Calloway, 2007 Tenn App. LEXIS 435 . Where the parties entered into an option agreement to last up to five years with six months notice of an intention to buy, but stating that the price would be mutually agreed upon based on an independent appraisal at the time of notice to purchase. The court cited this section of the treatise in finding that the option was fatally indefinite because it required the parties to mutually agree upon a price, thereby being nothing more than an agreement to agree. The case is more fully discussed in § 2.8.

(B) The following cases are noteworthy:

(1) Echols v. Pelullo, 2003 U.S. Dist. LEXIS 9935 (E.D. Pa. June 9, 2003) . The contract between the plaintiff, a professional boxer, and the defendant promoter clearly specified minimum purses the plaintiff would receive depending upon whether a bout was a title or a non-title fight and upon the specific television coverage of each fight. The contract provided that if the plaintiff should lose a fight, the defendant had the right to rescind the agreement, but, in the absence of rescission, the defendant would renegotiate the minimum purses. When the plaintiff lost a fight, the defendant did not elect to rescind the agreement, but neither did it renegotiate the purses. Instead, the defendant notified the plaintiff's agent that each bout would be subject to negotiation without the benefit of purse minimums. The plaintiff sought injunctive relief declaring the agreement unenforceable. The court held that the agreement was too indefinite to enforce since the defendant's decision not to honor the purse minimums but to renegotiate them with respect to each bout left an agreement without a price, which was a critical term. Thus, the parties had an agreement to agree, which amounted to nothing. The defendant's claim that there was a contract to negotiate in good faith was rejected since it did little to allow the court to effectuate an appropriate remedy.

The court's statement that, to be enforceable, a contract must contain all essential terms, particularly the price term, can be misleading. While the contract before the court was one for services and not for the sale of goods, it would have been helpful if the court had distinguished contracts without a price term that are enforceable under U.C.C. § 2-305 (the open price term) pursuant to the general formation directive in U.C.C. § 2-204(3) that a contract does not fail for indefiniteness if the parties intend to make a contract and there is reasonably certain basis for affording a remedy. Moreover, contracts for services occur on a regular basis absent a price term at the time of formation. For example, a homeowner with a flooded basement will not always insist on a definite price with a plumber as the water rises. Moreover, the plumber may refuse to provide such a price before commencing the service on the footing that the extent of the repair service cannot be accurately determined at that time. The price in such a contract is a reasonable price as it is in a contract for other services and for the sale of goods where the parties intend to be bound but leave the price to be determined. The critical basis for the court's holding is not the absence of a price term, which need not be fatal, but, under these facts, the absence of a sufficient basis for affording a remedy, which the court only mentions belatedly in the opinion.

On appeal, Echols v. Pelullo, 377 F.3d 272 (3d Cir. 2004) , the instant court reversed, finding the district court's conclusion to be ''overly simplistic.'' If the agreement was for one bout or a series of bouts, the absence of a price term may have made the contract fatally indefinite. The actual contract, however, created a relationship between the parties, provided for a $30,000 signing bonus and guaranteed an offer of three bouts per year. While the prices for these bouts were relevant, they were not so material that the alteration of these prices depending upon the circumstances would render the contract so indefinite as to be invalid. The terms of the agreement could be satisfied without any actual bouts, so long as the defendant made three bona fide offers to the plaintiff each year. A dissent argued that this construction would allow the defendant to make an offer at any price. The majority answered that the dissent ignored the requirement that only bona fide offers would satisfy the defendant's obligation. The majority had relied upon the Restatement (Second) of Contracts, § 33(2) and comment e, the parallel of § 2-305 of the Uniform Commercial Code, which is a species of § 2-204(3). The dissent argued that the majority's interpretation that the defendant had to make bona fide offers suggested an identity between ''bona fide'' and ''reasonable'' which the dissent found unsupported by case law in the relevant jurisdiction (Delaware) or elsewhere. Assuming that ''bona fide'' does imply the necessity for a ''reasonable'' price, the dissent argued that the majority's insistence on such an implication was inconsistent with the majority's holding that the price term in this agreement was not essential.

(2) Spurling v. Forestland Group, LLC, (6th Cir. 2006) . The plaintiff contacted the owner of land with an eye to earning a real estate broker's commission upon it sale. The owner provided the plaintiff with information from which the plaintiff produced a brochure that it provided to a number of potential buyers. The plaintiff contacted the defendant as a prospective buyer. The seller then notified the plaintiff that the land was not for sale. Two years later, the land was sold to the defendant through another broker. The plaintiff claimed a commission under an alleged oral agreement and a subsequent written agreement with the defendant. The court noted that Tennessee recognizes oral commission agreements but, like any other agreement, they must manifest the parties mutual assent and the other elements of an enforceable agreement including reasonable certainty of its terms. The defendant had been introduced to this property by another party prior to any involvement of the plaintiff. The seller had notified the plaintiff that the property was no longer for sale and the mere fact that almost two years later it was sold to the defendant did not establish a prior commission contract between the plaintiff and the defendant. The evidence of a written agreement to pay a commission was a letter stating that the defendant's willingness to pay a commission of any kind would depend upon its further interest in the property, after which it would discuss a ''reasonable commission.'' The plaintiff's response to this letter asked the defendant to ''clarify in writing'' the definition of ''reasonable commission.'' Citing § 33 of Restatement (Second) of Contracts, the court held that this completely undermined the plaintiff's assertion that any agreement, oral or written, had been reached. There was no binding contract.

(3) DiCarlo v. St. Mary's Hospital, 2006 U.S. Dist. LEXIS 49000 (D.N.J. 2006) . The plaintiff went to the defendant hospital suffering from an increased heart rate. He did not have health insurance nor did he qualify for medicare or medicaid. He was required to sign a form stating that he guaranteed the payment of ''all charges'' as well as collection expenses. The hospital bill (excluding separately billed physician's fees) was $3,483.04 which is a much greater amount than the price paid under Medicare, Medicaid or private insurance. The plaintiff asserted that the price terms were essentially ''open'' and he could only be charged a ''reasonable price'' as suggested in § 204 of the Restatement (Second) of Contracts. While the court recognized the ''facial persuasiveness'' of the plaintiff argument, it rejected it since it failed to consider the special situation of hospitals. The court explained that the defendant had a uniform set of charges which it applied to any patient. These charges, however, were ''discounted'' under various private and public insurance plans as well as under state law standards dealing with patients at various economic levels. The defendant, like other New Jersey hospitals, are highly regulated. Moreover, like other hospitals, the defendant also provided care without charge to some patients. The term ''all charges'' which the plaintiff agreed to pay was not an open price term since the charges were based on published but not discounted prices. When a patient in need of care arrives, until the diagnosis and treatment is provided, the ''charge'' for the service cannot be known. It is impracticable to provide a patient with the inches-high set of documents detailing every conceivable service which the patient could not possibly read and understand before agreeing to treatment. The type of form contract the plaintiff was required to sign is the only feasible way to communicate the patient's obligation under the special circumstances of one in need of medical care. The court also found it to be incongruous to assert that a hospital breached its contract by providing the patient with medical treatment and sending him a bill for charges not covered by insurance.

(4) Winston & Strawn, LLP v. FDIC, 2007 U. S. Dist. LEXIS 50681 (D.D.C. 2007) When the Ben Franklin Savings and Loan Association was placed in receivership, the IRS claimed taxes due of over a billion dollars which far exceeded the surplus held by the receiver, the defendant FDIC. The plaintiffs represented Ben Franklin shareholders and after lengthy negotiations, a settlement with the IRS reduced the tax bill to $40 million which left about $44 million in the receivership. As part of the settlement, the FDIC agreed to pay reasonable fees and expenses to the shareholders' attorneys. The notice of the settlement that was distributed to the shareholders stated that while the FDIC had not yet determined the total amount of the fees and expenses, ''the amount will likely be between $1 and $2 million.'' When the FDIC later paid these fees on the basis of an hourly rate, the plaintiffs claimed that, in relation to fees, the term ''reasonable'' in the settlement agreement should have been interpreted to invoke the ''common fund doctrine'' (see Swiss Hosp. Corp v. Shalala, 1 F. 3d 1261, 1265 (D. C. Cir. 1993)) typically applied in class actions that allow reasonable attorney's fees of 20 to 30 percent of the recovered fund. The court recognized that the settlement agreement did not define ''reasonable'' and, applying § 202 of the Restatement (Second) of Contracts, the court recognized the argument that a term should be interpreted in accordance with its generally prevailing meaning (here, according to the common fund concept) absent a different manifested intention. The ''percentage-of-the-fund'' method of paying ''reasonable'' attorney's fees would result in payments of $8-$12 million to the plaintiffs, well beyond the fees contemplated in the settlement statement of $1 to $2 million. The plaintiffs' motion for summary judgment that they should receive percentage fees in the range of 20 to 30 percent of the remaining surplus was denied.