Opinion ID: 2068258
Heading Depth: 2
Heading Rank: 1

Heading: contracts require specific terms

Text: Werner asserts that his June 1982 conversation with Brady culminated in an oral loan agreement. Although Werner admits that not all terms were specific, he contends that those unspecified terms could be determined by viewing previous dealings between the parties. Norwest claims that this lack of material terms proves that no valid contract exists under the law. The existence of a valid express contract is a question of law to be determined by a court, not a jury. Mid-America Mktg. Corp. v. Dakota Industries, 289 N.W.2d 797 (S.D.1980). An express contract results when the parties mutually express an intent to be bound by specific terms and conditions. Van Zee v. Witzke, 445 N.W.2d 34 (S.D.1989). Werner contends that these cites are inapplicable because the facts concerning the specific terms and conditions were not disputed or conflicting. He argues, on one hand, that these authorities are inapplicable because no express contract is involved. On the other hand, he claims the terms and conditions exist through discussions with Richard Brady and course of dealing, yet never argues for an implied contract. Therefore, the possibility of an implied contract must be deemed waived. SDCL 15-26A-60(6); Corbly v. Matheson, 335 N.W.2d 347 (S.D. 1983). Instead, Werner cites Belknap v. Belknap, 20 S.D. 482, 107 N.W. 692 (1906), which holds that the meaning of conflicting evidence in an oral contract is properly left to the jury. The major fault with Belknap (as well as most authorities cited by Werner) is that it applies where a contract is said to already exist. Such is not the case here. When requesting summary judgment, Norwest claimed that too many essential terms were not specified, such as the amount of the loan, interest rate, term, security, time and method of repayment, closing date, and the preparation and execution of written documents. Where there is no showing that the terms of an alleged oral agreement were ever settled or agreed upon, the trial court is proper in granting summary judgment. Deadwood Lodge No. 508 v. Albert, 319 N.W.2d 823, 826 (S.D. 1982), citing Engle v. Heier, 84 S.D. 535, 173 N.W.2d 454 (1970). As evident in his own brief, Werner fails to specify terms that indicate the existence of a contract. He cannot specify the amount of the loan, rather he gives a ballpark figure of between $70,000 and 80,000-$80,000 being the max. Yet, he has also testified that the amount needed could be as little as $60,000. He claims the interest rate could be inferred from his previous loan. For a security agreement on the alleged $70,000 to $80,000 loan, Werner points to a June 15, 1982 document. However, the June 15 note indicates a $6,000 loan. No evidence supports the security note's relation to PO3. In the past, whenever Werner received a loan from Norwest, notes were signed indicating a specified amount, due date, interest rate, method of payment and security. By failing to establish the specific terms, Werner purports an agreement that lacks the necessary elements required to create a binding contract. Nothing was reduced to a writing. According to Werner, the specifics are to be left to the jury to determine. We disagree. Nowhere does Werner profess the exact terms of the alleged contract. Both Werner and Norwest agree that several terms were not specified. Thus, there is no factual dispute. If the complaining party cannot allege what the facts are, how can he expect the jury to decide them. An agreement must be sufficiently definite to enable a court to give it an exact meaning. Deadwood Lodge at 826. Essentially, Werner wants a jury to create a contract from his estimates of the terms. No enforceable obligation can be established from this lack of specific terms. Other jurisdictions have granted summary judgments under the same circumstances. An oral contract is not established where essential terms are left open to future negotiations. Trans-america Equip. Leasing Corp. v. Union Bank, 426 F.2d 273 (9th Cir.1970). Where there was no understanding as to the exact amount of money, interest rate, time and method of repayment, and no exchange of documents, no enforceable contract can be said to exist. Champaign Nat'l. Bank v. Landers Seed Co., Inc., 165 Ill.App.3d 1090, 116 Ill.Dec. 742, 519 N.E.2d 957 (1988), cert. denied, 489 U.S. 1019, 109 S.Ct. 1138, 103 L.Ed.2d 199 (1989); Balter v. Pan American Bank, 383 So.2d 256 (Fla.App.1980); Marine Midland Bank v. Herriott, 10 Mass.App. 743, 412 N.E.2d 908 (1980); Willowood Condominium Ass'n, Inc. v. HNC Realty Co., 531 F.2d 1249 (5th Cir.1976). Werner filed suit to show the existence of an oral loan agreement, a contract, with Norwest. Yet Werner's own briefs and testimony show the lack of specific terms. Finding that Werner had not met his burden, the lower court granted summary judgment to Norwest holding that no material facts are in dispute that would prove the existence of a contract. We concur.