§6.4 - Certainty of Terms

• Jurisdiction: Washington

§6.4 CERTAINTY OF TERMS

Specific performance is only available if the parties have agreed on all of the material and essential terms of the contract, and the contract itself makes the precise act that is to be done clearly ascertainable. Hubbell v. Ward, 40 Wn.2d 779, 246 P.2d 468 (1952).

(1) General requirements

When the parties have not reached agreement, there is nothing for equity to enforce. Haire v. Patterson, 63 Wn.2d 282, 386 P.2d 953 (1963). When the contract includes an agreement to enter into a future contract (e.g., an option agreement), the contract must specify all of the material and essential terms of the future contract. Hagensen v. Petersen, 29 Wn.App. 721, 630 P.2d 1374 (1981).

In Kruse v. Hemp, 121 Wn.2d 715, 853 P.2d 1373 (1993), the court refused to grant specific performance of an option when the option agreement provided that the parties would enter into a real estate contract, but the form of contract was not attached. In Paullus v. Fowler, 59 Wn.2d 204, 367 P.2d 130 (1961), the court granted specific performance of an option despite uncertainties regarding the date that payments should commence and whether the stated payment amount included interest. The court in Kruse, 121 Wn.2d 715, explained that the Paullus decision was not inconsistent with the general rule established in Hubbell v. Ward, 40 Wn.2d 779, because the contract included all of the material and essential terms.

It is still possible, however, for a single, indefinite provision in a purchase agreement to make the entire agreement unenforceable by specific performance. For example, in 16th Street Investors, LLC v. Morrison, 153 Wn.App. 44, 223 P.2d 513 (2009), the seller of land included an option for him to purchase a unit if the property were developed as condominiums, but the terms of the option were not fully negotiated. The court held that the purchase agreement could not be specifically enforced and stated that when a party seeks specific performance, a higher standard of proof of "clear and unequivocal evidence that leaves no doubt as to the terms, character, and existence of the contract" must be met.

In Emrich v. Connell, 105 Wn.2d 551, 716 P.2d 863 (1986), an oral agreement that a lease would not be cancelled until the property was "ready to be developed" was held to be too vague and indefinite to support a decree of specific performance. In Russell v. Cook, 78 Wn.App. 427, 896 P.2d 1317 (1995), the Court of Appeals granted specific performance of a purchase and sale agreement when the closing date had been extended indefinitely in accordance with a provision of the agreement. The court noted that either party could have communicated a new closing date to the other party, and held that the uncertainty of the exact closing date did not make the agreement so uncertain as to avoid specific performance.

If the parties have agreed on all material and essential terms, but the agreement includes some uncertainty or ambiguity with respect to the parties' obligations, the doctrine of part performance may be available to remove the contract from the statute of frauds. However, part performance may not be used to establish material and essential terms upon which the parties never agreed. Kruse, 121 Wn.2d 715. In Berg v. Ting, 125 Wn.2d 544, 886 P.2d 564 (1995), the court made it clear that the doctrine of part performance will not be applied simply because a party has paid consideration or otherwise detrimentally relied upon the existence of the contract. The court identified the following three factors that must be examined to determine if there has been part performance sufficient to take the agreement out of the statute of frauds: (1) delivery and assumption of actual and exclusive possession; (2) payment or tender of consideration; and (3) the making of permanent, substantial, and valuable improvements, referable to the contract. Generally, the party asserting part performance must show at least two of these three factors. Bartlett v. Betlach, 136 Wn.App. 8, 146 P.3d 1235 (2006), review denied, 162 Wn.2d 1004 (2007). The court in Berg, 125 Wn.2d 544...