Selected Cases by Article & Issues
(1) If the parties intend to conclude a contract, the fact that they intentionally leave a term to be agreed upon in further negotiations or to be determined by one of the parties or by a third person does not prevent a contract from coming into existence.
(2) The existence of the contract is not affected by the fact that subsequently
(a) the parties reach no agreement on the term;
(b) the party who is to determine the term does not do so; or
(b) the third person does not determine the term,
provided that there is an alternative means of rendering the term definite that is reasonable in the circumstances, having regard to the intention of the parties.
|1||Contract with terms deliberately left open v. contract with missing terms (see e.g. Arts. 4.8, 5.1.2, 5.1.6, 5.1.7, 6.1.1(c ), 6.1.6, 6.1.7, 6.1.10, 6.1.11 and 7.4.9)|
|2||Valid conclusion of contract notwithstanding open terms||1|
|2.1||Express statement by parties|
|2.2||Inference from other circumstances||4|
|3||Mechanism provided for by parties for determination of open terms|
|3.1||Further negotiation between parties||3|
|3.2||Determination by third person|
|4||Failure of mechanism provided for by parties for determination of open terms|
|5||Open terms in long-term contracts|