Opinion · Supreme Court of North Carolina
Boyce v. McMahan
285 N.C. 730
- Type
- Opinion
- Court
- Supreme Court of North Carolina
- Jurisdiction
- North Carolina
- Date
- 1974-10-10
- Topic
- bankruptcy
stating that "a contract, or offer to contract, leaving material portions open for future agreement is nugatory and void for indefiniteness" | holding that a document “to enter into a preliminary agreement setting out the main features as to the desires of both parties and to execute a more detailed agreement at a later date” was insufficient to create an enforceable contract | providing that generally, “a contract, or offer to contract, leaving material portions open for future agreement is nugatory and void for indefiniteness” | as long as the parties know there is an essential term not yet agreed upon, there is no contract | "If any portion of the proposed terms is not settled, or no mode agreed on by which they may be settled, there is no agreement." | “In the usual case, the question whether an agreement is complete or partial is left to inference or further proof.” | “[An] offer to contract leaving material portions open for future agreement is nugatory and void for indefiniteness.” | “If any portion of the proposed terms is not settled, or no mode agreed on by which they may be settled, there is no agreement.” | “The reason for this rule is that there would be no way by which the court could determine what sort of a contract the negotiations would result in . . . .” (citation and quotation marks omitted) | “’If any portion of the proposed terms is not settled, or no mode agreed on by which they may be settled, there is no agreement.’” (quoting Croom v. Goldsboro Lumber Co., 182 N.C. 217, 220, 108 S.E. 735, 737 (1921)) | “‘If any portion of the proposed terms is not settled, or no mode agreed on by which they may be settled, there is no agreement.’” (quoting Croom v. Goldsboro Lumber Co., 182 N.C. 217, 220, 108 S.E. 735, 737 (1921)) | “The ‘preliminary’ agreement . . . begins by stating that it is a preliminary agreement and closes by reciting that a more detailed agreement will be made at some specific and subsequent date to be agreed upon by the parties” | “[the parties] must assent to the same thing 1 The parties appear to agree that North Carolina law governs this dispute. Under the Erie doctrine, a federal court sitting in diversity applies (1) the substantive law of the state in which it sits and (2
Citator
- Cited by
- 48 opinions
Generally when parties not under disability contract at arms’ length on a lawful subject, the courts will give redress to the injured party for a wrongful breach. On certain subjects and under certain conditions,’ contracts are required to be in writing. Others are valid if in parol. However, in either event the contracting parties must have agreed on all material terms of the contract.
*734 To constitute a valid contract, the parties “must assent to the same thing in the same sense, and their minds must meet as to all the terms. If any portion of the proposed terms is not settled, or no mode agreed on by which they may be settled, there is no agreement.” The foregoing is the language of Justice Adams in Croom v. Lumber Co., 182 N.C. 217, 108 S.E. 735, citing 13 C.J., 264; 6 R.C.L., 644; 1 Page on Contracts, sec. 28; Elks v. Ins. Co., 159 N.C. 619, 75 S.E. 808. See also Goeckel v. Stokely, 236 N.C. 604, 73 S.E. 2d 618; Sprinkle v. Ponder, 233 N.C. 312, 64 S.E. 2d 171; Kirby v. Board of Education, 230 N.C. 619, 55 S.E. 2d 322.
The courts generally hold a contract, or offer to contract, leaving material portions open for future agreement is nugatory and void for indefiniteness. “ ‘The reason for this rule is that there would be no way by which the court could determine what sort of a contract the negotiations would result in; no rule by which the court could ascertain what damages, if any, might follow a refusal to enter into such future contract on the arrival of the time specified. Therefore, a contract to enter into a future contract must specify all its material and essential terms, and leave none to be agreed upon as a result of future negotiations.’ 1 Elliot on Contracts, sec. 175.” Croom v. Lumber Co., supra.
In the usual case, the question whether an agreement is complete or partial is left to inference or further proof. In this case, however, the writing itself shows its incompleteness by emphasizing its preliminary character. It expresses the desires of the parties but not the agreement of both. “Whereas the Owner And Developer . . . desire to enter into a preliminary agreement setting out the main features as to the desires of both parties and to execute a more detailed agreement at a later date; . . . That the parties hereto agree to supplement this preliminary agreement by executing a more detailed agreement at some specific and subsequent date to be agreed to by the parties hereto.”
The “preliminary” agreement was written by defendant’s counsel at defendant’s request. It begins by stating that it is a preliminary agreement and closes by reciting that a more detailed agreement will be made at some specific and subsequent date to be agreed upon by the parties. The parties concede no further contract or agreement has been entered into.
When measured by applicable rules, the deficiencies in the subject document are manifest. It is incomplete and insufficient *735 to support either a decree of specific performance or damages for breach. The writing itself carries the terms which destroy its efficacy as a contract. The plaintiff is entitled to have it removed from the record.
The decision of the Court of Appeals reversing the superior court is
Affirmed.
Chief Justice Bobbitt not sitting.