Toys Inc. v. F.M.

Burlington Company
VT Supreme Ct 1990
Facts:
Proc Hist:

Toys filed for a breach of contract. Burlington argued that owing to

Toyss failure to accept the prevailing rate stated in Feb and a second
rent proposal made by Burlington in July, the renewal option had
lapsed. Trial Ct granted summary judgment, holding that the lease had
created a binding option. Burlington Appealed on the ground that the
option was too indefinite.

Issue:

Is an option agreement too indefinite to bind parties?

Holding:

Yes

Reasoning:

The test is whether the option agreement contains all material and
essential terms to be incorporated in the subsequent document.
The option agreement states that the fixed minimum rental shall be
renegotiated to the then prevailing rate within the mall. The ct found
that this language sets forth a definite, ascertainable method of
determining the price term for the lease extension.

Rule:

An option provision is sufficiently definite if it contains terms that allow

parties to satisfy their subsequent agreement.
Oglebay Norton Co. v. Armco Inc
Supreme Ct Ohio 1990

Facts:
Proc Hist:

In Nov 1987, the trial ct issued its declaratory judgment, fixing 6.25 as
the rate for the 1986 season and holding that, if the parties were
unable to agree on a rate for the upcoming seasons, the must notify
the court, which would appoint a mediator and require the parties CEO
to meet and mutually agree upon a rate. The ct of appeals affirmed
and a motion was made to certify the record.

Issue:

1. Did the parties intend to be bound by the terms of this contract

despite the failure of its primary and secondary pricing mechanisms?
2. If so, can the trial ct establish 6.25 per gross ton as a reasonable
rate?

Holding:

1. Yes
2. Yes

Reasoning:

1. The evidence demonstrated the long-standing and close business

relationship of the parties, including joint ventures, interlocking
directories, and Armcos ownership of Oglebay stock. The parties
themselves contractually recognized Armcos vital and unique interest
in the combined dedication of Oglebays bulk vessel fleet, and the
parties recognized that Oglebay could be recognized that Oglebay
could be required to ship up to 7.1 mil gross tons of Armco iron ore per
year.
2. Restatement Contracts 33 (Where the parties intend to conclude a
contract for the sale of goods . . . and the price is not settled, the price
is a reasonable price at the time of delivery if . . . the price is to be
fixed in terms of some agreed market or other standard as set or
recoded by a third person or agency and is not so set or recorded.)

Rule:

If parties to a contract cannot agree on the price, the court can set a
price so long as the parties intend to be bound by the contract.
C.R. Klewin Inc v. Flagship Properties Inc
Supreme Ct of Conn. 1991

Facts:
Proc Hist:
Issue:
Holding:
Reasoning:
Rule:

Richard v. Richard
Supreme Ct Rhode Island 2006
Facts:
Proc Hist:
Issue:

Holding:
Reasoning:
Rule: