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Definition of Indeterminate Contract

Definition of Indeterminate Contract

 

An indeterminate contract would
not be accepted as a fully legal contract under contract law primarily because
an indeterminate contract would not be considered effectual and binding. 

An
indeterminate contract would be a contract the terms of which would not be
clearly stated. An individual might attempt to use an indeterminate contract
instead of a fully laid out and specific contract in order to gain some kind of
advantage from the indeterminacy of the contract; for example, by
reinterpreting the vague conditions to his or her advantage at some later point
after the contract has been signed into effect.

Thus, an indeterminate contract
will likely be ruled as non-binding in general unless the contract’s
indeterminacy is in a particular section of the contract and the contract is
otherwise functional and enforceable. As an example of an indeterminate
contract, a contract which stated that “At some point in the future, Billy will
pay me $500” would be indeterminate, as there is no clear point in time at
which Billy will pay the money.

An indeterminate contract might
be kept under law under the principle of contra proferentem, which is the
principle that any indeterminate or ambiguous terms of the contract will be
taken to mean something against whichever group involved with the contract
introduced those terms to the contract. In other words, the party which is
responsible for introducing indeterminacy into the contract will be the party
penalized by the reading of the contract’s terms into a more specific fashion,
as opposed to any other party involved in the contract.

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