Certainty ( Formation)

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Last updated 11:49 PM on 9/11/26
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4 Terms

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what is certainity

  • ensuring the contract is upheld by having rights and obligations on each side



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2 step test for determining certianity

  1. did the parties intend to be legally bound immeditly. If the parties still have not agreed on terms.have future things it is unlikley they have Fletcher

  2. Is the term clear, if a non essential term is not clear it becomes redundant to the contract


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Determining an essential term

  1. must be outwardly manifested by one party as essential or

  2. it is needed for the contract to operate legally or

  3. both parties agree that it is an essential to the contract


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Considerations under certainity

  • if a term is vauge this does not stop it from being in the contract as will take action from the words and interactions of the parties Tower insurance

  • The more nebulous and unclear the term the less likley the court is to infer it

  • if they have discreetion over the agreement e.g. tenders then it is not a contract South Waikato DC v Asphalt roading

  • if the parties did not commonly intend to be legally bound then no contract