ESSENTIAL MATERIAL TERMS MUST BE SPECIFIED FOR CONTRACT TO BE ENFORCEABLE - RIGHTS AND OBLIGATIONS OF PARTIES MUST BE CLEARLY DEFINED FOR COURT TO ENFORCE CONTRACT
To be enforceable, a contract must be sufficiently definite in its terms that a court can understand what the promisor undertook. T. O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992). The material terms of the contract must be agreed on before a court can enforce it. Id.
If an alleged agreement is so indefinite as to make it impossible for a court to fix the legal obligations and liabilities of the parties, it cannot constitute an enforceable contract. University Nat'l Bank v. Ernst & Whinney, 773 S.W.2d 707, 710 (Tex. App.--San Antonio 1989, no writ).
A lack of definiteness in an agreement may concern various elements, including time of performance, price to be paid, work to be done, or service to be done. Gannon v. Baker, 830 S.W.2d 706, 709 (Tex. App.--Houston [1st Dist.] 1992, writ denied); Terrell v. Nelson Puett Mortgage Co., 511 S.W.2d 366, 369 (Tex. Civ. App.--Austin 1974, writ ref'd n.r.e.).
Whether an agreement has all the essential terms to be an enforceable agreement is a question of law. See America's Favorite Chicken Co. v. Samaras, 929 S.W.2d 617, 625 (Tex. App.--San Antonio 1996, writ denied). Each contract should be considered separately to determine its material terms. See T. O. Stanley Boot Co., 847 S.W.2d at 221 (citing Bridewell v. Pritchett, 562 S.W.2d 956, 958 (Tex. Civ. App.--Fort Worth 1978, writ ref'd n.r.e.)).
AGREEMENT TO AGREE [on unspecified contract terms yet to be determined] NOT ENFORCEABLE
To be enforceable, an agreement to enter into a future contract must specify all its material and essential terms, leaving none to be agreed on as the result of future negotiations. See Ski River Dev., Inc. v. McCalla, 167 S.W.3d 121, 135 (Tex. App.--Waco 2005, pet. denied) (citing Parker Chiropractic Research Found. v. Fairmont Dallas Hotel Co., 500 S.W.2d 196, 201 (Tex. Civ. App.--Dallas 1973, no writ)). When an essential term is left open for future negotiation, the parties have nothing more than an unenforceable "agreement to agree." See Oakrock Exploration Co. v. Killam, 87 S.W.3d 685, 690 (Tex. App.--San Antonio 2002, pet. denied).
SOURCE: Austin Court of Appeals - 03-10-00656-CV - 5/11/11
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