In Washington, the basic maxim is “An agreement is enforceable if its terms are reasonably certain.” The terms of a contract are “reasonably certain” if they provide the ability for determining a breach/default and for giving an appropriate remedy in case of breach/default.
Most problems of uncertainty appear in one of three ways. First, where the parties have claimed to agree upon a material term but left too indefinite to understand. Second where the parties do not address a material term. Third, where the parties have “agreed to agree” at a later time to a material term. Of course, sometimes the issues could cover more than one of these categories.
If materials terms are left undiscussed or indefinite, especially the price to be paid (or consideration to be provided), there will be no enforceable contract. Also, an “agreement to agree” is not enforceable in Washington.
However, not every term needs to be agreed upon for a contract to be enforceable. If nonmaterial, minor or collateral terms are not agreed to, yet, that will not cause the agreement to be unenforceable. The terms that are agreed to are still an enforceable contract. Also, a contract can still be reasonably certain even though even though one party (or both parties) to have some discretion in the course of performance. All “discretion” is generally determined to be exercised reasonably and not to frustrate the purpose of the contract.
Further, if the contract has commenced, the way it is performed gives context to the contract. Thus, even if a term is not spelled out in advance in the agreement, the way it has been being performed, gives the agreement context for how it is to be interpreted, constructed and enforced. The defense of uncertainty in an agreement's terms is not applicable in an action based upon the contract when performance has made the contract clear in every respect in which it might have been appeared as uncertain, vague or unenforceable.
In general, Washington Courts try not to declare a contract void for lack of certainty. “Courts do not lightly declare a contract void for lack of certainty, but will endeavor to discover the true meaning and intent of the parties.” Wetherbee v. Gary, 62 Wash. 2d 123, 127, 381 P.2d 237, 239 (1963) This is because “contract law serves society's interest in performance of promises” Landstar Inway Inc. v. Samrow, 181 Wash. App. 109, 129, 325 P.3d 327, 339 (2014) Washington Courts highly regard “the principle of freedom to contract, parties are free to enter into, and courts are generally willing to enforce, contracts that do not contravene public policy.” Keystone Land & Dev. Co. v. Xerox Corp., 152 Wash.2d 171, 176, 94 P.3d 945 (2004). Thus, Washington Courts will try to ascertain the what the contract's true meaning is and intent of the parties. And, then, Washington courts will hold parties to a contract bound by its terms. Torgerson v. One Lincoln Tower, LLC, 166 Wash.2d 510, 517, 210 P.3d 318 (2009).
Aric Bomsztyk represents companies and business owners enforcing all manner of business contracts and agreements. Mr. Bomsztyk can also draft or advise on contracts and agreements for businesses. Please contact him at (206) 621-1871 with any questions, he will provide a free consultation.