TOPIC 4

Uncertainty and Incomplete Agreements

Learning Outcomes
At the end of this topic you should be able to:
(i) Understand the concept of the requirement of certainty;
(ii) Know that uncertainty may stem from vagueness or
incompleteness in the essential contractual terms;
(iii) Explain the basic principle in relation to how the courts try and
make an uncertain agreement certain;
(iv) Identify and give examples of incomplete agreements; and
(v) Explain the basic principle in relation to how the courts try to
make incomplete agreements certain.

Prescribed Reading
Corrin Care; J Contract Law in the South Pacific, Chapter 3.

Prescribed Cases

Prasad v Hussein (1967) 13 FLR 98. (Provided at the end of this topic.)
Sherani v Jagroop and Others (1973) 19 FLR 85. (Provided at the end of this
topic.)
Scammell v Ouston [1941] AC 251 (Poole 64 – 65).
Hillas & Co v Arcos (1932) 38 Com Cas 23 (Poole, 65 – 66)
Sudbrook v Eggleton [1983] 1 AC 444 (HL) (Poole 75 – 77)
1. Certainty in agreements
Contractual terms have to be certain and the agreement must define with some
precision the obligations that the parties are to undertake. An agreement is not
binding if it lacks certainty. This may come about because the essential terms
of the agreement are: (i) too vague, or (ii) incomplete.

2. The Court's approach to resolving uncertainty

Even if an agreement is uncertain, the courts will often find some way to render it
certain. This is because the courts are concerned about giving effect to the
intentions of the parties and will be slow to find that an agreement made between
them is not to be enforced simply because of some uncertainty in its formulation.
The approach taken by the courts to determine whether an uncertain agreement
can be rendered certain is as follows:
(i) If it appears that the true intention of the parties was not to enter into a
binding agreement until and unless certain unsettled terms of their
bargain are settled by later agreement between them, then no contract
can come into existence in the absence of such further agreement.
(ii) If the court is satisfied that the real intention of the parties was to enter
into an immediate and binding agreement then the court will do its best
to give effect to that intention.
(iii) Apparent lack of certainty will be cured if some means or standard can
be found whereby that which has been left uncertain can be rendered
certain.
(iv) Inferences as to the intention of the parties regarding the finality of the
agreement they have reached may be drawn from both the importance of
the uncertain matter and from the extent to which the parties have acted
on the agreement.

3. Vagueness
An agreement may be so vague that no definite meaning can be given to it
without adding new terms.

STUDY TASK 1

1. What were the facts of Scammell and Nephew Ltd v Ouston?

2. Why did the court hold that the contract was too vague?
3. Identify a quote from the case that provides the statement of legal
principle

LW201: Contract Law I 6.2

STUDY TASK 2

Read Sherani v Jagroop and Others

1. Why was this agreement too vague?

4. Remedying vagueness
The courts do not require agreements to be strictly precise and will always try to
avoid striking the agreement down on the ground that it is too vague. Some of the
methods used by the courts to assist it in making certain that which is too vague
are as follows:

A. Custom and trade usage

Apparent vagueness may be resolved if the courts construe that the parties
intended to enter into a final agreement and resolve the vague term by trade
custom. For example, where two parties entered into a contract to load coal at a
coal mine called Grimsby and the contract stated that the terms of the contract
were to be the same as a 'usual coal loading contract' then the court in such a case
would uphold the contract on proof of the terms usually contained in such
contracts at Grimsby.

STUDY TASK 3

Read Hillas and Co v Arcos (1932) 147 LT 503 (HL)

1. What was the uncertainty in this case?

2. How was the uncertainty resolved?

B. Meaningless phrases
The courts may also resolve problems of vagueness if it is determined that the
parties intended to enter into a final agreement and that the vague term is
meaningless. A term will be meaningless if it can be deleted and still leave a
perfectly workable agreement that represents the intentions of the parties. This
occurred in Nicolene Ltd v Simmonds [1953] 1 All ER 822 (CA) where the
contract contained the statement 'we are in agreement that the usual conditions of
acceptance apply'. Since there were no 'usual conditions' it was held that this was
simply a meaningless phrase which could be ignored.

5. Incomplete agreements
Incompleteness occurs where perfectly clear words are used,
What is an
but they do not settle an essential part of the contractual
incomplete
terms. If an agreement leaves incomplete and indeterminable
agreement?
an essential term of a contract, then the courts will not

LW201: Contract Law I 6.3

enforce the contract. An example is the case of Fong Lee v Mital
and Ram Kissum (1966) 12 FLR 4 where a majority of the Court
of Appeal (Fiji) held that the clause giving the purchaser the right
to first refusal in relation to the sale of land was void, as the price
at which Ram Kissun could purchase the property was not stated.
Incompleteness may arise in a variety of situations:

A. Agreement in principle only

Incompleteness may occur if the parties come to an agreement in principle only,
while leaving important details of the contract unsettled. For example Joe owns a
rental property and enters into an agreement to lease it to Steve, however, there is
no price or commencement date included in the agreement. Here, there is only
agreement in principle and no contract.

STUDY TASK 4

Read Prasad v Hussein

1. What is the case authority the court used? What legal principle does that
case authority provide?
2. What was the outcome in the case? Why? (how did the law apply to the
facts?)

B. Further agreement expressly required

Incompleteness can exist if an agreement provides that certain matters are to be
agreed later, or from time to time.
An 'agreement to agree' is thought to be too uncertain as there is no way for the
courts to provide a remedy if no agreement is reached. This is because 'agreeing
to agree' relies entirely on the parties, with their own subjective views and
desires. For example Heta and Marama enter into an agreement that Heta will
paint a picture of Marama and her family. They agree that they will decide a price
for the painting later. Heta paints the picture but Marama refuses to accept it or
pay anything for it. Heta seeks to enforce the agreement.
In this example the court has no way of establishing what Heta and Marama's
intentions were regarding the painting's price. Therefore, a court would be using
its own judgment and not respecting the intentions of the parties if it imposed a
price. It is more likely that a court would find there is no contract.

C. Agreements to negotiate
Incompleteness may also exist if the parties have made an agreement to negotiate.
The rationale behind holding that ‘agreements to negotiate’ lack certainty is the
same as that which applies to 'agreements to agree'. (Courtney and Fairbairn Ltd
v Tolani Brothers (Hotels) Ltd [1975] 1 WLR 297 (CA))

LW201: Contract Law I 6.4

6. Clarifying incomplete agreements
As noted above, the courts will try and clarify agreements that are incomplete.
There are three methods for resolving uncertainty that arises from an incomplete
agreement.

A. Implied means or standards

The courts will often imply a means or standard to make an incomplete
agreement certain. For example, in relation to the price for the sale of goods, the
courts will often be prepared to accept that a 'reasonable price' (based on market
value) was intended.

B. Express machinery provisions

The agreement may itself provide machinery for resolving matters which have
been left open in the agreement. For example, the agreement may indicate that
the price of the property is to be set by an independent arbitrator or valuer.
However, it is not every case that the machinery provided in a contract will be
applicable to the determination of the terms of the contract. For example in May
and Butcher v R [1934] 2 KB 17 (HL) there was an arbitration clause but it was
held not to cover the situation of setting the price. The court found that it was
limited in application to disputes between the parties once the contract was
formed, not for the sorting out of the terms of the agreement.
It is also important to note that the courts have established that an agreement is
not necessarily ineffective merely because the agreed machinery is defective. For
example if the price of an item is to be determined by two valuers, one to be
nominated by each party and one of the parties refuses to appoint a valuer, it is
likely the court would hold that the agreement is not void for uncertainty. If the
machinery failed the court could substitute its own means of determining a fair
price. However, the courts will not fix defective machinery mechanisms if it is
not possible to establish an appropriate standard, or where the machinery
provided for a purely subjective means of determining the term.

C. Statutory provisions
The third method by which incomplete agreements can be made certain is
through various statutory provisions. See for example s 8 of the Sale of Goods
Act 1979 (UK); s 9 of the Sale of Goods Act (Samoa); s 11 of the Consumer
Guarantees Act 1993 (NZ); s 10 of the Sale of Goods Act (Cap 230) (Fiji); s 10
Sale of Goods Act 1986 (Marshall Islands). The effect of these statutory
provisions is that if the missing term is as to price, the contract will be interpreted
as if the buyer was to pay a reasonable price for the goods. Note that Sale of
Goods legislation does not extend to contracts for the sale of land.

SOME SELF ASSESSMENT QUESTIONS

LW201: Contract Law I 6.5

1. What are the ways in which a contract may be held to be uncertain? Explain
the difference between these types of uncertainty. What is the consequence of
a finding that the agreement is too uncertain?
2. Mr Teri is a car salesman with a yard containing 20 cars. Your client Mr
Roberts enters into the following written agreement with Mr Teri:
3. Mr Teri agrees to sell the car to Mr Roberts. The car is to be in the standard
condition of cars in Fiji. The price is to be agreed at a later date.
4. Mr Robert's has decided that he does not want to continue with the agreement.
Advise him on any legal issues that might allow him to argue that the
agreement is too uncertain. Would it make any difference if the agreement
said instead the price was to be determined by an independent valuer?

LW201: Contract Law I 6.6

Prasad v Hussein [1967] FJLawRp 50;
[1967] 13 FLR 98 (28 April 1967)
[1967] 13 FLR 98

SUPREME COURT

Civil Jurisdiction

SHAMBHU PRASAD

ALI HUSSEIN

Hammett J.

4th, 28th April 1967

Vendor and purchaser — protected Crown Lease — consent of Director of Lands to

agreement for sale — application for consent — whether signature of application by
purchaser necessary.
Vendor and purchaser — contract for sale of leasehold — written instructions to solicitor
to prepare agreement — some material matters not specified — insufficient
memorandum. Contract — some terms of contractual nature agreed — instructions in
writing to solicitor to prepare agreement for sale — agreement to maize agreement.

Crown land — protected Crown Lease — consent of Director of Lands to sate — whether
application must be signed by purchaser.

The plaintiff and defendant signed a document instructing a solicitor to prepare an

agreement for sale and purchase of a protected Crown Lease belonging to the plaintiff.
The consent of the Director of Lands, requisite to such an agreement, was not obtained.
At a mortgagee's sale of the land in question the defendant became the purchaser at a
price £400 less than that specified in the instructions to the solicitor. In an action by the
plaintiff for damages the defendant contended that the consent of the Director of Lands
was a condition precedent to any obligation on his part, to which the plaintiff said that the
absence of the consent was due to the refusal of the defendant to sign the application
therefor.

Held: I. There being no provision in law requiring a purchaser as well as the vendor to
sign such an application the court was not satisfied that the defendant's failure to sign was
the reason for the consent not having been obtained.

LW201: Contract Law I 6.7

2. In any event on the evidence the dealings between the parties did not amount to a
completed contract but only to an agreement to make an agreement the complete terms of
which had not been settled.

Case referred to: Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353.

Action against purchaser for failure to complete.

K. C. Ramrakha for the plaintiff.

R. I. Kapadia for the defendant.

The facts sufficiently appear from the judgment.

HAMMETT J.: [28th April, 1967]—

The Plaintiff was the owner of a protected Crown Lease No. 2862 in Samabula North,
Suva on which he had built his house. The property was under mortgage to the Bank of
New Zealand and in 1961 the Plaintiff fell into financial difficulties.

He arranged to sell the property to the Defendant and on 16th August, 1961, they both
went to see Mr. Dhaliwal a solicitor then in private practice. Two alternative
arrangements were made. Firstly, if the Bank would agree, the Plaintiff was to sell the
house for £2,600 to be paid by a deposit of £300 and the balance to be provided by the
Bank on a further mortgage. Under this arrangement the Plaintiff was to remain in
possession for three years. The second arrangement was for a sale, with vacant possession
for £3,300 of which £1,000 was to be paid by way of a deposit and the balance to be
provided by the Bank on mortgage.

Quite apart from any covenants under the mortgage, it was clear that neither of these
arrangements could be carried out without the Bank's agreement, and the Plaintiff gave
Mr. Dhaliwal written instructions dated 15th August, 1961, to see the Bank Manager
about the matter. Following the visit to the Bank the Plaintiff and Defendant agreed with
the consent of the Bank that the sale was to take place for £3,300 with vacant possession
on the basis of the second alternative arrangement.

The same day the parties both signed joint instructions to Mr. Dhaliwal on the matter in
the following terms: —.

Suva.
M. S. Dhaliwal,
 Solicitor, Suva.

We the undersigned ALI HUSSEN and S. SHAMBHU PRASAD hereby instruct you to
prepare a Sale and Purchase agreement as follows: —
PROPERTY: S. PRASAD'S house at Lakemba Street.
PRICE: £3,300.0.0.
DEPOSIT: £1,000.
BALANCE: Under New Zealand Bank.
We undertake to pay £82.0.0 re costs and disbursements.

LW201: Contract Law I 6.8

 Left thumb of All Hussein

Sgd. Shambhu Prasad

Witness: Sgd. Muni Deo."

It is agreed that this being a protected Crown Lease, the sale could not take place without
the consent of the Director of Lands. This consent was never obtained. No Sale and
Purchase Agreement was ever signed by the Defendant or the Plaintiff and the sale did not
take place.

On 1st November, 1961, the Bank of New Zealand in exercise of its powers of sale under
its Mortgage sold the property by public Auction. Both the Plaintiff and the Defendant
attended the auction where the Defendant was the highest bidder and bought the property
for £2,900.

It is the case for the Plaintiff that the Defendant is in breach of contract in failing to
complete the purchase of the property from him as agreed on 8th August, 1961, for
£3,300 and he claims damages.

The Defendant does not dispute the facts. He does, however, contend that the agreement
between the parties was subject to a condition precedent that no obligations were to arise
until the consent of both the Bank of New Zealand and the Director of Lands to the
agreement had been obtained. He contends that neither of these consents were, or have
ever been, given to their agreement which did not therefore create any legal obligations.

The only evidence before me is that of the Plaintiff and the documents admitted by
consent. The Plaintiff conceded that the consent of the Director of Lands had not been
obtained but that the Bank of New Zealand did consent to the sale to the Defendant for
£3,300. I have no reason to disbelieve the Plaintiffs evidence on these issues and I accept
it.

The Plaintiff contends that the reason why the Director of Lands did not give his consent
to the sale to the Defendant was that the Defendant refused to sign the form of application
for such consent.
I know of no provision in the law that requires the purchaser as well as the vendor to sign
an application to the Director of Lands for his consent to the sale of a Crown Lease. There
is no evidence that the Plaintiff or the Solicitor acting for both parties ever forwarded to
the Director of Lands the document, already set out in this Judgment, which is now relied
upon either as a contract for the sale of land or as a note or memorandum of such a
contract, and sought his consent to such a sale. It has not been proved or suggested that an
application for the Director's consent signed by the solicitor acting for both parties
coupled with this document would not have been accepted by him as a sufficient
application for his consent. In fact the letter dated 7th November, 1961, by the Director of
Lands to the Plaintiffs Solicitor (which was put in evidence with the consent of the
Plaintiff) appears to indicate that this was all the Director of Lands had required.

I am not therefore satisfied that any failure by the Defendant to sign an application to the
Director of Lands for his consent was the reason why his consent was not obtained. It has
not been shown to my satisfaction that it was not within the power of the Plaintiff to have
applied for and obtained that consent notwithstanding any omission on the part of the
Defendant.

But there is another, and in my view a more substantial reason why the Plaintiffs claim in
this case must fail. The Plaintiff relies on a verbal contract of sale of which he submits

LW201: Contract Law I 6.9

that the document signed by both parties on 8th August, 1961, already set out in this
judgment, is a note or memorandum, sufficient to satisfy the requirements of the law in
this respect. It is on this note or memorandum that the Plaintiff relies to prove his oral
contract with the Defendant. This note clearly shows that the parties had agreed to the sale
and purchase on terms to be set out in a Sale and Purchase Agreement which, by this note
or memorandum, they jointly instructed Mr. Dhaliwal to prepare. In this note there is no
reference to a number of material matters upon which agreement was necessary and
which it would have been necessary to insert in the Sale and Purchase Agreement, for
example the date upon which the transfer was to be completed and possession given.

The arrangements made verbally between the parties as evidenced by this note or
memorandum were clearly made "subject to contract". There are many cases on the point
of what is meant by such expressions as "subject to contract".

My attention has, been drawn to the Judgment of Dixon C.J. in Masters v

Cameron [1954] HCA 72; (1954) 91 CLR 353 at page 360 where, he said:

"Where parties who have been in negotiation reach agreement upon terms of a
contractual nature and also agree that the matter of their negotiation shall be dealt
with by a formal contract, the case may belong to any of three classes. It may be
one in which the parties have reached finality in arranging all the terms of their
bargain and intend to be immediately bound to the performance of those terms,
but at the same time propose to have the terms restated in a form which will be
fuller or more precise but not different in effect. Or, secondly, it 'may be a case in
which the parties have completely agreed upon all the terms of their bargain and
intend no departure from or addition to that which their agreed terms express or
imply, but never-the less have made performance of one or more of the terms
conditional upon the execution of a formal document. Or, thirdly, the case may be
one in which the intention of the parties is .not to make a concluded bargain at all,
unless and until they execute a formal contract."

He went on to .say that in the first two of these classes there was a binding contract
whereas in the third there was none.

I am, with' respect, of the opinion that the three classes referred to in Masters' cafe are not
exhaustive, and the facts of this case do not fall within any of these three classes of case.

In this case the parties had been in negotiation and certainly reached some terms of a
contractual nature. They had also agreed that the matter of their negotiation should be
dealt with by a formal contract, but they had not arranged all the necessary terms of their
bargain.

On the question of the date of completion it is of interest to note that according to the
terms of the Sale and Purchase Agreement, (which was admitted by consent as Ex. D)
which was prepared for their signature but not in fact signed by either the Plaintiff or the
Defendant, the date of completion by the handing over a transfer signed by the Plaintiff
might not have taken place until over six years, i.e., after the payment by the Defendant to
the Bank of New Zealand of £30 a month unless the Bank should earlier demand payment
in full. The Plaintiff never suggested that this was agreed orally and no mention of this
appears in the document relied upon as a note or memorandum of a contract for sale.

On the Plaintiffs testimony and the documents produced in evidence before me I am

satisfied that the negotiations or dealings between the parties did not amount to a
completed contract but only to an agreement to make an agreement, the complete terms of

LW201: Contract Law I 6.10

which had not yet been settled. In reaching this conclusion I have given careful
consideration to what effect should be given to the admissions made in paragraph 4 of the
defence but I do not consider this is inconsistent with my findings on the effect of the
Plaintiffs evidence. Further, I have not been satisfied that any failure on the part of the
Defendant to co-operate with the Plaintiff to obtain the consent of the Director of Lands to
the transaction was necessarily fatal to the failure to obtain such consent.

For these reasons there will be judgment for the defendant on the claim

The Defendant has counter-claimed for mesne profits in respect of the whole of the land
and dwelling house from the 14th November, 1961, until 29th May, 1962, and for the use
of and occupation by the Plaintiff of the top flat from 29th May to 30th June, 1962. The
only evidence before me on this issue is that of the Plaintiff himself who stated that he
only occupied two rooms in the house throughout this period. There is no evidence of
what would be a proper charge for this or that as a result any loss was occasioned to the
Defendant. In my view, on the evidence before me, the Defendant is however entitled to a
nominal award in this respect. The total period was approximately 7 ½ months and I shall
assess the Defendant's claim on the counter-claim at the rate of £1 per room per month,
i.e., a total of £15.

There will therefore be Judgment for the Defendant on the counter-claim for £15.

I would like to hear Counsel further before making any orders for costs in this case.

Judgment for defendant on claim and counter-claim.

LW201: Contract Law I 6.11

Sherani v Jagroop [1973] FJLawRp 18; [1973] 19 FLR 85 (24 October 1973)

[1973] 19 FLR 85

IN THE SUPREME COURT OF FIJI

SHER MOHAMMED KHAN SHERANl

v.
MANOHAR JAGROOP AND OTHERS

[SUPREME COURT, 1973 (Tuivaga J.), 24th October]

CIVIL JURISDICTION

Contract - lease and option to purchase beneficial interest in residuary estate - whether

such disposition legally enforceable prior to the administration of the estate.

Contract – certainty - whether contract for lease unenforceable for lack of certainty of
subject matter.

Executors and trustees - powers of executors to sell and lease land for the purposes of
administration - Succession Probate and Administration Ordinance 1970, s. 11 (1) (2) (3)
- whether purported lease and sale effected in course of administration.

Under the will of the deceased, the third defendant was given one undivided half share of
the residuary estate. The third defendant was granted probate whereupon he agreed with
the plaintiff to lease to him his one half undivided share of all the land comprised in a
particular Certificate of Title together with the shop premises erected thereon. Under the
terms of the lease the plaintiff acquired an option to purchase the undivided half share for
$2500, which option was exercisable at any time during the currency of the lease. A
month later the plaintiff exercised his option to purchase.

Subsequently the third defendant was removed from the executorship of the estate and
was replaced by the first and second defendants as the new executors. By order of the
Supreme Court the estate became vested in the first and second defendants. The plaintiff
then requested the new executors to transfer to him the third defendant's undivided half
share in accordance with their agreement, but the executors refused to acknowledge the
plaintiff's alleged rights to any part of the estate.

Held: 1. Until the residuary estate had been ascertained in the course of administration
and distributed, a residuary legatee and devisee under a will had no claim or any right of
dealing with his share. In the present case the administration of the estate was still
incomplete and the third defendant had no right in his personal capacity to enter into any
agreement for a lease.

2. According to the Succession Probate and Administration Ordinance 1970, s. 11(3) the
powers of an executor to sell and lease real estate can only be exercised for the purposes
of administration. Even if the third defendant was acting as an executor, the purported
lease and sale by him of his own undivided half share in the Certificate of Title could not

LW201: Contract Law I 6.12

be construed to have been carried out in the course of administration of the estate, but was
a private commercial transaction.

3. It was, in any event, impossible to ascertain and identify the particular area and nature
of the land which the third defendant purported to lease to the plaintiff.

Cases referred to:

Bernado's Homes v. I.R.C. [1921] 2 A.C. 1.

Lord Sudeley v. Attorney General [1897] A.C. 11.
Re Kemnal and Still's Contract [1923] 1 Ch. 293.

Action by the plaintiff against the first and second defendants as executors and the third
defendant for breach of agreement for a. lease.

F. M. K. Sherani for the plaintiff.

K. Parshotam for the first and second defendants.
R. G. Kermode for the third defendant.

TUIVAGA J. [24th October 1973]-

This action is brought by the plaintiff against the 1st and 2nd defendants as executors and
trustees of the estate of Sohan Jag Roop s/o Jag Roop and the 3rd defendant for breach of
an agreement for a lease allegedly entered into by the plaintiff and the 3rd defendant when
the 3rd defendant was executor of the said estate.

The plaintiff claims -

(i) specific performance; or alternatively;

(ii) refund of $1430.50 paid as consideration damages for breach thereof; and

(iii) costs of this action.

The facts in this case are substantially not in dispute and I hold them to be as follows. On
the 8th August 1960 Probate No. 6859 in the matter of the estate of Sohan Jag Roop
(deceased) was granted to the 3rd defendant and one Sanohar s/o Jag Roop who had died
prior to the dealing in question. Paragraph 1 of the Will of the said Sohan Jag Roop
states:-

"I GIVE DEVISE AND BEQUEATH all my real and personal property
whatsoever and wheresoever to my- trustees UPON TRUST to sell call in and
convert into money such parts of my estate as shall not consist of money or of
investments (with power in their absolute discretion to postpone such sale calling
in or conversion without being responsible for any loss occasioned thereby) and
out of the ready moneys of which I shall be possessed at my death and the clear
moneys to arise from such sale calling in and conversion to pay my death duties
funeral and testamentary expenses and to stand possessed of the residue of the
proceeds of such sale calling in and conversion and of such investments and of all

LW201: Contract Law I 6.13

 parts of my estate for the time being unsold (hereinafter called my "residuary
estate") upon the following trusts:

(a) to divide my residuary estate into two equal parts and to give one such part to
my said son Baldeo absolutely.

(b) to divide the other such part into four equal shares and to give one such share
to my brother Nohar and his son Balichand as tenants in common in equal shares,
and one such share to my brother Manohar, and one such share to my brother
Sanohar and one such share to my brother Lalchand."

Thus it is clear that under the Will one undivided half share of the residuary estate of the
testator was to be given to the 3rd defendant while the other undivided half share was to
be divided in four equal shares and given respectively to the 1st and 2nd defendants and
other named beneficiaries. On the 21st September 1967 the plaintiff and the 3rd defendant
entered into an agreement (Ex.7) whereby the third defendant agreed to lease to the
plaintiff his one undivided half share of all land comprised in Certificate of Title No. 7108
being Lot 1 on Deposited Plan No. 2882 containing 1 acre, 3 roods and 23.9 perches
together with the shop premises erected thereon. Under the terms of the lease the plaintiff
acquired an option to purchase the 3rd defendant's undivided half share in Certificate of
Title No. 7108 for a sum of £2,500 and this option may be exercised at any time during
the currency of the lease. It was further agreed that in the event of the option being
exercised by the plaintiff the land would be subdivided and the costs involved would be
paid out of the sum of £2,500. On the 12th October, 1967 the plaintiff exercised his option
to purchase and paid the 3rd defendant a sum of £40 In cash being part payment towards
the purchase of his one undivided half share in Certificate of Title No. 7108. The
operative parts of the agreement whereby the plaintiff exercised his option to purchase are
as follows:

"WHEREBY IT IS AGREED AS FOLLOWS:

(i) the lessee has this day exercised his option to purchase and has paid the lessor
the sum of £40 (Forty pounds) in cash being part payment towards the said
purchase price of £2,500 at the request of the lessor. (The receipt of which said
sum of £40 the lessor does hereby admit and acknowledge);

(ii) the lessor undertakes to proceed with the subdivision of the demised land;

(iii) the lessor shall be paid the balance of the purchase price of £2,650 or such
sum as may be due and owing when the subdivision is completed and when the
lessor is able to give a title free from all encumbrances at the rate of £50 (Fifty
pounds) per month."

On the 15th September 1968 the 3rd defendant was removed from the executorship of the
estate of Sohan Jag Roop and was replaced by the 1st and 2nd defendants as the new
executors. By the order of the Supreme Court the estate became vested in the 1st and 2nd
defendants as executors and trustees. On or about the 5th of March 1969 the plaintiff
through his solicitors made representations to the 1st and 2nd defendants as executors of
the estate to transfer to him the 3rd defendant's undivided half share in Certificate of Title
No. 7108 in accordance with the agreements of 21st September 1967 and 12th October
1967 but the 1st and 2nd defendants have refused to acknowledge the plaintiff's alleged
rights to any part of the estate. It is admitted that a total sum of $1,430.50 was paid by the
plaintiff to the 3rd defendant towards the purchase price of his one undivided half share in

LW201: Contract Law I 6.14

the said Certificate of Title No. 7108. The plaintiff was and is still ready, willing and able
to pay the balance of the purchase price.

Counsel for the plaintiff submits that the agreement to lease the 3rd defendant's undivided
half share in Certificate of Title No. 7108 and the exercise of this option to purchase same
was binding at law in as much as the 3rd defendant as executor at the material time had
powers by virtue of Section 11 of the Succession, Probate and Administration Ordinance,
1970 to enter into a lease or sale of the testator's land. Section 11 provides:-

"11.-(1) The real as well as the personal estate of every deceased person shall be
assets in the hands of the executor to whom probate has been granted, or
administrator, for the payment of all duties and fees and of the debts of the
deceased in the ordinary course of administration.

(2) No executor or administrator shall by virtue of such office have or exercise

any right of retainer in priority to the other creditors of the estate in respect of any
debt due to him.

(3) An executor to whom probate has been granted, or administrator, may, for the
purposes of administration, sell or lease such real estate, or mortgage the same,
with or without a power of sale, and assure the same to a purchaser or mortgagee
in as full and effectual a manner as the deceased could have done in his lifetime."

Apart from the above provisions which give wide powers to the 3rd defendant as executor
of the estate the 3rd defendant as a beneficiary and sui juris was entitled to enter into an
agreement in his personal capacity to lease or sell his interest in Certificate of Title No.
7108.

Counsel for the 3rd defendant has made submissions with which counsel for the 1st and
2nd defendants has expressed full agreement. Counsel for the 3rd defendant submits that
at the material time the 3rd defendant had no vested title in the land in question as to
enable him to dispose of it by way of lease or sale. It follows that there was no binding
contract. Thus as there could not have been any breach of contract the question of specific
performance cannot possibly arise in the circumstances of this case. Counsel referred to
the following statement in paragraph 367 of Halsbury's Laws of England (2nd Edition):-

"Want of mutuality is in general a ground for refusing a judgment of specific

performance: if a contract cannot be enforced against one party by reason of
circumstances existing at the date of the contract, such as personal incapacity or
the nature of the contract, that party will not be enabled to enforce the contract
against the other party. Thus............ a vendor of property in or over which he had
no estate or power at the time of the sale may be met by this fact as a defence to a
suit by him of specific performance."

Counsel also referred this Court to paragraphs 382 and 385 which state:-

"382. Where it is sought to enforce specific performance of a contract, the Court

must be satisfied (1) that there is a concluded contract in fact; (2) that the contract
so concluded is not incomplete by reason that the parties have failed to agree,
expressly or by implication, on some essential matter; (3) that the contract is
precise and certain, or, in other words, that, although all essential matters may
have been dealt with, there is not such uncertainty and vagueness that exact
performance cannot be ordered.

LW201: Contract Law I 6.15

385. The Court, before enforcing a contract, must be satisfied that it is certain.

Uncertainty may arise in various ways, which may be classified as follows:

(1) where the contract is so vague in its general terms that the obligations of the parties
are not ascertainable; (2) Where the subject-matter of the contract is not sufficiently
identified; (3) Where the parties are not sufficiently identified; (4) Where in the case of a
sale, the price is not ascertained; and (5) Where some material term of the contract is
omitted."

It is also submitted that the agreement was oppressive as against the 3rd defendant. Under
the terms of the agreement he was required to pay the costs of the subdivision out of his
own purchase price of the lease i.e. out of £2500. In this connection Counsel refers to
paragraph 414 which states:-

"The discretion of the Court to grant specific performance is not exercised if the
contract is not "equal and fair." In such a case, even though no fraud such as to
justify rescission is alleged, the Court does not interfere to enforce the contract."

It is also submitted that supervision of the Court would be required for specific
performance. The testator's Will does not make any specific devise to the 3rd defendant
whose share must await the ascertainment of the residuary estate.

Thus they will be faced with an overwhelming practical problem of enforcement.

Furthermore it is submitted that the agreement to lease or the option to purchase is legally
unenforceable on the ground of uncertainty of the land purported to be demised.

On the evidence adduced before this Court I think it is quite clear that the 3rd defendant
purported to enter into the agreement for lease with the plaintiff not in his capacity as
executor of the estate but in his personal capacity. The real question therefore is whether
the 3rd defendant could legally dispose of his beneficial interest in the residuary estate by
way of lease or sale in his personal capacity and before the estate has been administered.
It is clear from the authorities that until the residuary estate has been ascertained in the
course of administration and distributed a residuary legatee or devisee under a will has no
claim or any right whatsoever of dealing with his share. The legal position is summarised
in Parry's Law of Succession (4th Edition) at page 225 as follows:-

"A residuary legatee or devisee, however, has no claim to any of the deceased's
estate in specie nor to any part of that estate until the residue is ascertained. His
right is to have the estate administered and then applied for his benefit."

In support of the above statement the case of Bernado's Homes v. I.R.C. [1921] 2 A.C. 1
was cited amongst others. In that case Viscount Cave at page 10 observed:

"When the personal estate (and undoubtedly including real estate) of a testator has
been fully administered by his executors and the net residue ascertained, the
residuary legatee is entitled to have the residue as so ascertained, with any
accrued income, transferred and paid to him; but until that time he has no
property in any specific investment forming part of the estate or in the income
from any such investment, and both corpus and income are the property of the
executors and are applicable by as a mixed fund for the purposes of
administration."

LW201: Contract Law I 6.16

A similar observation was made in the same case by Viscount Finlay where at page 8 he
said:

"It appears to me that the present case is really decided by the decision of this
House in Lord Sudeley's case [1897] A.C. 11. It was pointed out in that case that
the legatee of a share in a residue has no interest in any of the property of the
testator until the residue has been ascertained. His right is to have the estate
properly administered and applied for his benefit when the administration is
complete."

In similar vein Lord Atkinson at page 11 said:

"The case of Lord Sudeley v. Attorney-General [1897] A.C. 11 decided in this

House conclusively established that until the claims against the testator's estate
for debts, legacies, testamentary expenses, etc., have been satisfied, the residue
does not come into actual existence. It is a non-existent thing until that event has
occurred. The probability that there will be a residue is not enough. It must be
actually ascertained."

There is no evidence that at the time of the purported lease to the plaintiff the residuary
estate had been ascertained and administered in accordance with the will nor is there any
evidence that Certificate of Title No. 7108 forms part of the residuary estate of the testator
and in which he was to take one undivided half share. In these circumstances I would
infer that administration of the estate was still in process and is not yet complete so that
the 3rd defendant had no right in his personal capacity at the material time to enter into an
agreement for a lease with the plaintiff in the manner which he purported to have done. It
follows in my opinion that the agreement to lease and the option to purchase cannot be
legally enforced.

If contrary to my finding of fact, the 3rd defendant was indeed acting as executor of the
estate when he purported to lease and sell the land in question, the plaintiff would still
have to overcome in my opinion the difficulty raised by section 11 of the Succession,
Probate and Administration Ordinance. I do not think the section gives an executor such
wide powers of leasing and sale of land as counsel for the plaintiff contends. Subsection
(3) thereof makes this I think quite clear. It states:-

"(3)-An executor to whom probate has been granted, or administrator, may, for
the purposes of administration, sell or lease such real estate or mortgage the same,
with or without a power of sale, and assure the same to a purchaser or mortgagee
in as full and effectual a manner as the deceased could have clone in his lifetime."

According to these provisions the powers of an executor to sell or lease real estate can
only be exercised for the "purposes of administration". This is a restriction which has
always been recognized in this branch of the law. (See Re Kemnal and Still's
Contract [1923] 1 Ch. 293). On the evidence before this Court I do not think it can be said
that the purported lease and sale by the executor of his own beneficial interest in the form
of one undivided half share in Certificate of Title No. 7108 was done in the course of
administration of the estate. I think there can be no doubt that the arrangement between
the executor of the estate and the plaintiff concerning Certificate of Title No. 7108 was
more in the nature of a commercial dealing quite unrelated to any question of realization
of assets of the testator. These statutory provisions would therefore appear to afford little
or no assistance to the plaintiff in support of his claim.

LW201: Contract Law I 6.17

There is a further difficulty against the plaintiff's claim arising from the contention which
I wholly accept that the contract for a lease is unenforceable for lack of certainty of the
subject matter of the contract. The description of the property, the subject matter of the
alleged lease, is in the following terms:

"lease of one undivided half share of all that land comprised in Certificate of Title
No. 7108 being Lot 1 on Deposited Plan No. 2882 containing 1 acre 3 roods and
23.9 perches together with the shop premises erected thereon and more
particularly delineated in the sketch plan annexed hereto and marked RED to
which the lessor is beneficially entitled."

As matters stand and having regard to the evidence it would be impossible to ascertain
and identify the particular area and nature of the land which the 3rd defendant purported
to lease to the plaintiff. This was not ascertained nor can it possibly be ascertained even
with parol evidence because there are other beneficiaries who are also entitled by way of
undivided shares in the same residuary estate and in particular in Certificate of Title No.
7108 and who clearly have not been consulted about the purported lease of the property in
question to the plaintiff.

For the reasons I have indicated in the foregoing the substantive action against the
defendants must fail and is accordingly dismissed. The payment by the plaintiff to the 3rd
defendant of a sum of $1430.50 having been admitted, a refund thereof is ordered. The
plaintiff must pay the costs of the 1st and 2nd defendants. No order as to cost is made as
between the plaintiff and 3rd defendant who must each bear his own costs.

Plaintiff's action dismissed.

LW201: Contract Law I 6.18