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Micro Capital Inv'rs, Inc. v. Broyhill Furniture Indus. - 221 N.C. App. 94, 728 S.E.2d 376 (2012)

Rule:

In order to constitute a valid and enforceable contract there must be an agreement of the parties upon the essential terms of the contract, definite within themselves or capable of being made definite. A contract will not be held unenforceable because of uncertainty if the intent of the parties can be determined from the language used, construed with reference to the circumstances surrounding the making of the contract, and its terms reduced to a reasonable certainty. 

Facts:

Plaintiff investers' claim hinges on Section 10 of the contract, which it claims requires defendant furniture warehouse owner to "be responsible" for ¼ of the "total heating bill" for the Plant and Warehouse. Defendant counters that Section 10 is not enforceable because the term "total heating bill" is too indefinite, demonstrating that there was no meeting of the minds as to that essential term. The contested provision, states: 10. The Leased Warehouse does not contain its own heating system and will need to be serviced by whatever heating system is decided upon for the Premises. Buyer shall supply sufficient heat from the heating system in the Premises to adequately heat the Leased Warehouse from the date of Closing to the date Seller no longer continues to rent the Leased Warehouse. Buyer may charge Seller for one-fourth (1/4th) of the total heating bill for the Premises and the Leased Warehouse, subject to adjustment in the event either party's operations require more heat than currently anticipated. Buyer agrees to sign such further documents as Seller requires at Closing to evidence the agreement in this paragraph.”

Issue:

Did the trial court err when it concluded that Section 10 of the contract unenforceable?

Answer:

No

Conclusion:

The term "total heating bill" is too indefinite, demonstrating that there was no meeting of the minds as to that essential term. Under other circumstances, the term "total heating bill" might be definite, but under these circumstances, it was not. Because of the unusual heating system - wood-burning boilers that run on wood waste, a byproduct of the manufacturing process that takes place within the Plant, which  also power the manufacturing equipment - there was no "heating bill" from a third party like the power company. The parties never agreed what components would constitute a "total heating bill" and, thus, the term was too indefinite to be enforceable. There is no contract unless the parties assent to the same thing in the same sense. A contract is the agreement of two minds—the coming together of two minds on a thing done or to be done. A contract, express or implied, executed or executory, results  from the concurrence of minds of two or more persons, and its legal consequences are not dependent upon the impressions or understandings of one alone of the parties to it. It is not what either thinks, but what both agree.

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