Definition of Indeterminate Contract

Definition of Indeterminate Contract

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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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