When a Contract Isn't a Contract

Going into the 1860 Republican nominating convention, it was far from certain who would emerge as the presidential candidate for the young party. One of those with hopes of winning the nomination, Abraham Lincoln, did not attend the convention but had friends there lobbying on his behalf. But Lincoln gave strict instructions to not make any deals in order to win the support of others: “I authorize no bargains and will be bound by none,” he wrote. Despite these orders, Lincoln’s men did negotiate a deal, helping Lincoln to secure the vote of the Pennsylvania delegation in exchange for a cabinet position for Simon Cameron. After Lincoln’s election to the presidency, he named Cameron as the secretary of war in order to honor the political bargain.

                It is not hard to imagine that such deals continue to take place today. And politicians aren’t the only ones willing to make promises in exchange for something they value—even my young children are learning the art of negotiating. They are teaching me that I still have a lot to learn as well. Once I told my four-year-old son that if he were in bed by a certain time then he would be rewarded with a treat to eat the next day. After he was in bed he asked for his treat, which I explained he would have eat in the morning. He was heartbroken. Apparently he didn’t hear the part about not eating the treat until the morning. (We compromised: he got to eat the treat but then had to brush his teeth again). I learned (again) that I need to be very clear and specific with my children when making deals with them.

This is also an important legal principle to understand, and ambiguous terms in a contract can lead to unnecessary litigation. Courts in Arizona have ruled that in order for a contract to actually be a contract, there must be “sufficient specification of terms to that the obligations involved can be ascertained.” Terms must be specific regarding the “time of performance, place of performance, price or compensation, penalty provisions, and other material requirements of the agreement.” So, for example, if I agree to buy your car and you agree to sell it, we still may not have a contract unless we set a specific price for the vehicle. At the same time, however, courts will sometimes enforce agreements where it is clear the parties intended to be bound and where the specifics can be reasonably determined by the circumstances. But why take the risk? If you are bargaining to get a child in bed on time, or for something less important like a cabinet position, it is best to be very specific in what you agree to give up and what you expect to receive in return.