Saliba-Kringlen Corp. v. Allen Engineering Co. (1971)

4. Lack of agreement on content of the subcontract.

It is undisputed that the customary practice in the construction industry is for the general contractor who is awarded a contract to enter into a written contract with the subcontractor, which written contract embraces far more than the price which the subcontractor has bid by telephone. The additional matters would include such things as whether the subcontractor would furnish a bond, who would provide for insurance, how payments would be made and many other matters. Although the provisions other than price are not identical in all subcontracts generally or in electrical subcontracts particularly, price is the principal item as is evident from the fact (as shown by the evidence) that seldom does a general contractor fail to reach an agreement with the subcontractor whose bid is low. Defendant asserts that it should not be held to its bid price because the general contractor could not have known that the general contractor and defendant would have reached an agreement on the terms of the subcontract.

While a prospective subcontractor could submit a bid by way of a written proposed subcontract including not only the price but all other details, we are not aware that this is ever done. The customary bid is made, as it was here, by a brief telephone call in which only the price is stated. If defendant’s position is correct, there would never be an occasion to invoke section 90 of the Restatement of Contracts by a general contractor against a prospective subcontractor. fn. 4 Even a subcontractor who did not make a mistake in his bid price but who desired to avoid doing the work because of increased costs, other commitments or any other reason could claim that his bid is not binding because it is incomplete. But California has not taken that position. In Drennan the bid was one of price only and it is obvious that the general contractor would have entered into a written subcontract with the prospective subcontractor containing terms other than price. The Supreme Court nevertheless held that the subcontractor’s bid was binding. The same rule must be applied here.

It should be noted that here the lack of an electrical subcontract between the general contractor and defendant was not due to the failure of the parties negotiating in good faith to arrive at the terms other than price. We do not intimate what our conclusion would be had that been the case. Here, as in Drennan, the parties did not get around to discussing contract provisions because defendant made it clear that it would not do the work at the price bid regardless of the other contractual provisions.

In: justia

AROK Const. Co. v. Indian Const. Services

174 Ariz. 291 (1993)

848 P.2d 870

AROK CONSTRUCTION COMPANY, a California Corporation, Plaintiff-Appellant, v. INDIAN CONSTRUCTION SERVICES, a joint venture between Evcor Builders, Inc., Jeremiah La Mesa and Jane Doe La Mesa, Defendants-Appellees.

Court of Appeals of Arizona, Division 1, Department B.

February 11, 1993.

“The enforcement of incomplete agreements is a necessary fact of economic life. Business people are not soothsayers, and can neither provide in advance for every unforseen contingency nor answer every unasked question regarding a commercial agreement. This is especially so with a complex contract for a major construction project. Nor are entrepreneurs perfect at drafting legal documents. Finally, parties may want to bind themselves and at the same time desire to leave some matters open for future resolution in order to maintain flexibility. Thus, courts are often presented with incomplete bargains when the parties intend and desire to be bound. See Gillian Hadfield, Problematic Relations: Franchising and the Law of Incomplete Contracts, 42 STAN.L.REV. 927 (1990). Refusing the enforcement of obligations the parties intended to create and that marketplace transactions require hardly seems the solution.”

In: leagle

Rego v. Decker , 482 P.2d 834 ( 1971 )

482 P.2d 834 (1971)
Joseph P. REGO, Cecile Rego, et al., Appellants,
Robert L. DECKER, Appellee.

No. 1128.
Supreme Court of Alaska.

March 19, 1971.

“Regarding the rule requiring reasonable certainty and its application to particular factual situations, Alaska Creamery and Lewis demonstrate that:

The dream of a mechanical justice is recognized for what it is – only a dream and not even a rosy or desirable one.

In general it has been said that the primary underlying purpose of the law of contracts is the attempted “realization of reasonable expectations that have been induced by the making of a promise.” In light of this underlying purpose, two general considerations become relevant to solution of reasonable certainty-specific performance problems. On the one hand, courts should fill gaps in contracts to ensure fairness where the reasonable expectations of the parties are fairly clear. The parties to a contract often cannot negotiate and draft solutions to all the problems which may arise. Except in transactions involving very large amounts of money or adhesion contracts to be imposed on many parties, contracts tend to be skeletal, because the amount of time and money needed to produce a more complete contract would be disproportionate to the value of the transaction to the parties. Courts would impose too great a burden on the business community if the standards of certainty were set too high. On the other hand, the courts should not impose on a party any performance to which he did not and probably would not have agreed. Where the character of a gap in an agreement manifests failure to reach an agreement rather than a sketchy agreement, or where gaps cannot be filled *838 with confidence that the reasonable expectations of the parties are being fulfilled, then specific enforcement should be denied for lack of reasonable certainty.

Several other considerations affect the standard of certainty. A greater degree of certainty is required for specific performance than for damages, because of the difficulty of framing a decree specifying the performance required, as compared with the relative facility with which a breach may be perceived for purposes of awarding damages. Less certainty is required where the party seeking specific performance has substantially shifted his position in reliance on the supposed contract, than where the contract is wholly unperformed on both sides.”


Academy Chicago Publishers v. Cheever

578 N.E.2d 981 (1991)

144 Ill. 2d 24

161 Ill. Dec. 335


No. 70587.

Supreme Court of Illinois.

June 20, 1991.

Rehearing Denied September 30, 1991.

*982 John Thomas Moran, Jr., Marc L. Fogelberg, McBride, Baker & Coles, Chicago, for Academy Chicago Publishers.

M. Leslie Kite, M. Leslie Kite & Associates, P.C., Chicago, Martin Garbus, Maura Wogan, Russell Smith, Frankfurt, Garbus, Klein & Selz, New York City, for Mary W. Cheever.

Justice HEIPLE delivered the opinion of the court:

This is a suit for declaratory judgment. It arose out of an agreement between the widow of the widely published author, John Cheever, and Academy Chicago Publishers. Contact between the parties began in 1987 when the publisher approached Mrs. Cheever about the possibility of publishing a collection of Mr. Cheever’s short stories which, though previously published, had never been collected into a single anthology. In August of that year, a publishing agreement was signed which provided, in pertinent part:

“Agreement made this 15th day of August 1987, between Academy Chicago Publishers or any affiliated entity or imprint (hereinafter referred to as the Publisher) and Mary W. Cheever and Franklin H. Dennis of the USA (hereinafter referred to as Author). Whereas the parties are desirous of publishing and having published a certain work or works, tentatively titled The Uncollected Stories of John Cheever (hereinafter referred to as the Work): * * * * * * 2. The Author will deliver to the Publisher on a mutually agreeable date one copy of the manuscript of the Work as finally arranged by the editor and satisfactory to the Publisher in form and content. * * * * * * 5. Within a reasonable time and a mutually agreeable date after delivery of the final revised manuscript, the Publisher will publish the Work at its own expense, in such style and manner *983 and at such price as it deems best, and will keep the Work in print as long as it deems it expedient; but it will not be responsible for delays caused by circumstances beyond its control.”

Academy and its editor, Franklin Dennis, assumed the task of locating and procuring the uncollected stories and delivering them to Mrs. Cheever. Mrs. Cheever and Mr. Dennis received partial advances for manuscript preparation. By the end of 1987, Academy had located and delivered more than 60 uncollected stories to Mrs. Cheever. Shortly thereafter, Mrs. Cheever informed Academy in writing that she objected to the publication of the book and attempted to return her advance.

Academy filed suit in the circuit court of Cook County in February 1988, seeking a declaratory judgment: (1) granting Academy the exclusive right to publish the tentatively titled, “The Uncollected Stories of John Cheever”; (2) designating Franklin Dennis as the book’s editor; and (3) obligating Mrs. Cheever to deliver the manuscript from which the work was to be published. The trial court entered an order declaring, inter alia: (1) that the publishing agreement executed by the parties was valid and enforceable; (2) that Mrs. Cheever was entitled to select the short stories to be included in the manuscript for publication; (3) that Mrs. Cheever would comply with her obligations of good faith and fair dealing if she delivered a manuscript including at least 10 to 15 stories totaling at least 140 pages; (4) Academy controlled the design and format of the work to be published, but control must be exercised in cooperation with Mrs. Cheever.

Academy appealed the trial court’s order, challenging particularly the declaration regarding the minimum story and page numbers for Mrs. Cheever’s compliance with the publishing agreement, and the declaration that Academy must consult with defendant on all matters of publication of the manuscript.

The appellate court affirmed the decision of the trial court with respect to the validity and enforceability of the publishing agreement and the minimum story and page number requirements for Mrs. Cheever’s compliance with same. The appellate court reversed the trial court’s declaration regarding control of publication, stating that the trial court erred in considering extrinsic evidence to interpret the agreement regarding control of the publication, given the explicit language of the agreement granting exclusive control to Academy. (200 Ill.App.3d 677, 146 Ill. Dec. 386, 558 N.E.2d 349.) Appeal is taken in this court pursuant to Supreme Court Rule 315(a) (134 Ill.2d R. 315(a)).

The parties raise several issues on appeal; this matter, however, is one of contract and we confine our discussion to the issue of the validity and enforceability of the publishing agreement.

While the trial court and the appellate court agreed that the publishing agreement constitutes a valid and enforceable contract, we cannot concur. The principles of contract state that in order for a valid contract to be formed, an “offer must be so definite as to its material terms or require such definite terms in the acceptance that the promises and performances to be rendered by each party are reasonably certain.” (1 Williston, Contracts §§ 38 through 48 (3d ed. 1957); 1 Corbin, Contracts §§ 95 through 100 (1963).) 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. 1 Williston § 37; 1 Corbin § 95.

The pertinent language of this agreement lacks the definite and certain essential terms required for the formation of an enforceable contract. (Midland Hotel Corp. v. Reuben H. Donnelley Corp. (1987), 118 Ill. 2d 306, 113 Ill. Dec. 252, 515 N.E.2d 61.) A contract “is sufficiently definite and certain to be enforceable if the court is enabled from the terms and provisions thereof, under proper rules of construction and applicable principles of equity, to ascertain what the parties have agreed to do.” (Morey v. Hoffman (1957), 12 Ill. 2d 125145 N.E.2d 644.) The provisions of the subject publishing agreement *984 do not provide the court with a means of determining the intent of the parties.

Trial testimony reveals that a major source of controversy between the parties is the length and content of the proposed book. The agreement sheds no light on the minimum or maximum number of stories or pages necessary for publication of the collection, nor is there any implicit language from which we can glean the intentions of the parties with respect to this essential contract term. The publishing agreement is similarly silent with respect to who will decide which stories will be included in the collection. Other omissions, ambiguities, unresolved essential terms and illusory terms are: No date certain for delivery of the manuscript. No definition of the criteria which would render the manuscript satisfactory to the publisher either as to form or content. No date certain as to when publication will occur. No certainty as to style or manner in which the book will be published nor is there any indication as to the price at which such book will be sold, or the length of time publication shall continue, all of which terms are left to the sole discretion of the publisher.

A contract may be enforced even though some contract terms may be missing or left to be agreed upon, but if the essential terms are so uncertain that there is no basis for deciding whether the agreement has been kept or broken, there is no contract. (Champaign National Bank v. Landers Seed Co. (1988), 165 Ill.App.3d 1090, 116 Ill. Dec. 742, 519 N.E.2d 957, Restatement (Second) of Contracts § 33 (1981).) Without setting forth adequate terms for compliance, the publishing agreement provides no basis for determining when breach has occurred, and, therefore, is not a valid and enforceable contract.

An enforceable contract must include a meeting of the minds or mutual assent as to the terms of the contract. (Midland Hotel, 118 Ill. 2d at 313, 113 Ill. Dec. 252, 515 N.E.2d 61.) It is not compelling that the parties share a subjective understanding as to the terms of the contract; the parties’ conduct may indicate an agreement to the terms of same. (Steinberg v. Chicago Medical School (1977), 69 Ill. 2d 320, 13 Ill. Dec. 699, 371 N.E.2d 634.) In the instant case, however, no mutual assent has been illustrated. The parties did not and do not share a common understanding of the essential terms of the publishing agreement.

In rendering its judgment, the trial court supplied minimum terms for Mrs. Cheever’s compliance, including story and page numbers. It is not uncommon for a court to supply a missing material term, as the reasonable conclusion often is that the parties intended that the term be supplied by implication. However, where the subject matter of the contract has not been decided upon and there is no standard available for reasonable implication, courts ordinarily refuse to supply the missing term. (1 Williston § 42; 1 Corbin § 100.) No suitable standard was available for the trial court to apply. It is our opinion that the trial court incorrectly supplied minimum compliance terms to the publishing agreement, as the agreement did not constitute a valid and enforceable contract to begin with. As noted above, the publishing agreement contains major unresolved uncertainties. It is not the role of the court to rewrite the contract and spell out essential elements not included therein.

In light of our decision that there was no valid and enforceable contract between the parties, we need not address other issues raised on appeal. For the foregoing reasons, the decisions of the trial and appellate courts in this declaratory judgment action are reversed.


Justices CLARK and FREEMAN took no part in the consideration or decision of this opinion.

In: justia

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