D. Vagueness

• Author: John D. McCamus
• Profession: Professor of Law. Osgoode Hall Law School, York University
• Pages: 104-110

Page 104

If a particular term of a contract is so vague or imprecise that a court cannot give a meaning to the term that the court can comfortably enforce, the agreement will fail on grounds of uncertainty. In Scammell (G.) and Nephew, Limited v. Ouston,⁵⁰for example, the phrase "hire-purchase terms" was held to be so vague as to render the contract unenforceable. The defendant dealer had agreed to sell a van to the plaintiff customer for a particular price coupled with a trade-in of the customer’s current vehicle. The oral agreement of the parties was recorded by the customer in a letter that acknowledged the dealer’s acceptance of the order "given on the understanding that the balance of purchase price can be had on hire-purchase terms over a period of two years." Although the dealer later arranged for hire-purchase financing for the transaction, the dealer withdrew from the transaction, alleging deficiencies in the trade-in vehicle and defended the customer’s ultimate action to enforce on the basis that the agreement was so vague as to be unenforceable. The House of Lords held the agreement to be unenforceable on this basis. Lord Wright explained the approach to be taken in the following terms:

The object of the court is to do justice between the parties, and the court will do its best, if satisfied that there was an ascertainable and determinate intention to contract, to give effect to that intention, looking at the substance and not mere form. It will not be deterred by mere difficulties of interpretation. Difficulty is not synonymous

Page 105

with ambiguity so long as any definite meaning can be extracted. But the test of intention is to be found in the words used. If these words, considered however broadly and untechnically and with due regard to all the just implications, fail to evince any definite meaning on which the court can safely act, the court has no choice but to say there is no contract.⁵¹Lord Wright went on to note that there were several different ways in which a hire-purchase agreement could be arranged and concluded that it would not be right to impose any particular form of agreement on the dealer. He went on to suggest, however, that if the parties had agreed to a hire-purchase agreement on the "usual terms" and further, if the court were supplied with evidence to define what the terms of a usual hire-purchase agreement might be, sufficient meaning might be given to the term to render the agreement enforceable.

As other cases demonstrate, however, a mere reference to the "usual terms" will not address the problem of uncertainty if there are, in fact, no usual terms being referred to by that phrase. Thus, in Nicolene Ltd. v. Simmonds,⁵²a seller who coupled acceptance of an order with a statement that he assumed that "we are in agreement that the usual conditions of acceptance apply"⁵³had not successfully incorporated such conditions. In the view of Denning L.J. there were simply no usual conditions of acceptance to which this phase referred. Accordingly, the "words are meaningless. There is nothing to which they can apply."⁵⁴The clause was "so vague and uncertain to be incapable of any precise meaning."⁵⁵It was also the view of the Court of Appeal that quite apart from this clause, the parties had agreed to only the essential terms of the agreement and accordingly, though the "usual conditions" term must be ignored, the contract was nevertheless an enforceable one. In a Canadian case, Buyers v.Begg,⁵⁶a contract for the purchase and sale of land that provided that the parties would enter "an agreement for the sale containing the usual covenants" failed for uncertainty on the ground that there was no evidence before the court indicating that there was, in fact, a usual form of such an agreement in current use within the province.⁵⁷

Page 106

Agreements that require parties to make "best efforts" or "best endeavours" to fulfil certain undertakings may appear to be unattractively vague and difficult to enforce. As a general rule, however, courts have found it possible to give sufficient content to such provisions as to render them enforceable. In Atmospheric Diving Systems Inc. v. International Hard Suits Inc.⁵⁸a British Columbia trial judge surveyed the extensive prior jurisprudence on this point and concluded that "best efforts" clauses impose a higher obligation than a mere "reasonable effort" and that best efforts can be defined as requiring the promisor to take "in good faith all reasonable steps to achieve the objective carrying the process to its logical conclusion and leaving no stone unturned."⁵⁹Further, the concept "includes doing everything known to be usual, necessary and proper for ensuring the success of the endeavour."⁶⁰The obligation to undertake such measures is not however boundless and must be considered in the context of the particular agreement. In the judge’s view, it is not necessary to establish that the promisor has acted in bad faith. On the actual facts of this case, the trial judge held that the seller of highly expensive diving suits, which amounted, in effect, to one-man submarines, who had promised the customer that it would, within one year of purchase use its...