In order to enforce a promise, a court must be able to sufficiently determine that it is certain and specific as to what the original promise was. Otherwise, a court, in intervening, would be imposing its own conception of what the parties should or might have undertaken on the parties, rather than confining itself to the implementation of a bargain to which they have mutually committed themselves.
Defendant leased a retail location to the plaintiff for a five-year term, on a graduated rent scale. The lease agreement contained a renewal clause, which provided for future rent "to be agreed upon." Plaintiff wanted to renew the lease, but the landlord would not agree upon a reasonable rent. Plaintiff sued for specific performance, to compel the landlord to extend the lease at a reasonable rate. The trial court ruled in the defendant's favor, and found that there was no definite agreement to renew within the parties' contract if the parties could not agree upon the terms. The plaintiff appealed and prevailed at the appellate level. The defendant appealed to the Court of Appeals.
Could the contract between the parties could be enforced against either party where it failed to specify a lease rate?
On appeal, the court reversed the lower court's ruling, which held that the term was enforceable. The court held that it was well settled in the common law of contracts that a mere agreement to agree, in which a material term is left for future negotiations, was unenforceable, especially if the term at issue was the amount to be paid for the sale or lease of real property.