THE SUPREME COURT OF THE
FEDERATED STATES OF MICRONESIA
Cite as Jim v. Alik ,
4 FSM Intrm. 199 (Kosrae S. Ct. Tr. 1989)
KOS. CIV. NO. 55-88
Before Harry H. Skilling
Trial Date: October 27, 1989
Decided: November 24, 1989
For the Plaintiff: Harry Seymour
Micronesian Legal Services Corporation
Tofol, Kosrae State 96944
For the Defendant: Rison Wakuk
Utwe, Kosrae State 96944
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Where an agreement between two parties is so vague and uncertain that the court cannot determine who is the breaching party, or cannot fashion a remedy to enforce the agreement, there is no contract. Jim v. Alik, 4 FSM Intrm. 199, 200 (Kos. S. Ct. Tr. 1989).
Contracts; Equity - Restitution
Where no contract existed for lack of definite terms, the court must use its inherent equity power to fashion a remedy under the doctrine of restitution. Jim v. Alik, 4 FSM Intrm. 199, 200 (Kos. S. Ct. Tr. 1989).
Equity - Restitution
Restitution is a remedy which returns the benefits already received by a party to the party who gave them where the court can find no contract. Jim v. Alik, 4 FSM Intrm. 199, 201 (Kos. S. Ct. Tr. 1989).
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HARRY H. SKILLING, Chief Justice:
This matter came on for trial on October 27, 1989. Plaintiff was represented by Harry Seymour, defendant by Rison Wakuk.
The facts are as follows. Plaintiff and defendant agreed that plaintiff would purchase from defendant a Subaru Van; purchase price $2,500; terms $1,000 down and the balance to be paid in installments. The period of installments was disputed and uncertain at trial.
Plaintiff took the van home, replaced the tires costing fifty-four
dollars ($54) and the fuel pump, costing two hundred thirty-one dollars ($231). For four months thereafter plaintiff made no installment payments.
Subsequently, defendant sent his younger brother to repossess the van, which he did. Plaintiff now seeks more than $3,500 in damages for breach of contract.
The first issue presented is whether the agreement entered into between plaintiff and defendant was the type of agreement which this Court will enforce. Stated differently, did the agreement contain sufficiently definite terms to constitute a contract?
Generally, a contract, in order to be enforceable by law:
...must be definite and certain as to its terms and requirements; it must identify the subject matter and spell out the essential commitments and agreements with respect thereto....It is evident that courts can specifically enforce agreements nor award substantial damages for their breach when they are wanting in certainty.
17 Am. Jur. 2d Contracts § 75, at 413-14 (1964). Where the agreement between the parties is too vague and uncertain that the Court cannot determine who is the breaching party, or cannot fashion a remedy to enforce the agreement, there is no contract. The Restatement (Second) of Contracts states that an agreement must "provide a basis for determining the existence of a breach and for giving an appropriate remedy." Restatement (Second) of Contracts § 33(2) (1979).
Here, the Court is unable to determine, from the evidence presented, which party breached the agreement. This is because the parties did not agree upon sufficiently definite terms regarding when installment payments were to be made. the parties unfortunately did not reduce their agreement to writing, and only provided that further payments would be made sometime in the future. From this evidence the Court simply cannot determine which party was in breach.
Though subsequent acts of the parties can cure the indefiniteness, see generally Farnsworth, Contracts § 3.28, at 196 (1982), the Court finds no evidence of any subsequent acts here that could set a date for installment payments.
Having found that no contract existed for lack of definite terms, the Court is presented with a situation where defendant retains an improved van and the cash paid for the downpayment. In order to remedy the situation, the Court must use its inherent equity power to fashion a remedy under the doctrine of restitution.
Restitution is a remedy which returns the benefits already received by a party to the party who gave them where the court can find no contract.
See Farnsworth, Contracts § 12.19, at 903. It has been defined as:
not only the restoration or giving back of something to its rightful owner, but also compensation, reimbursement, indemnification, or reparation for benefits derived from, or for loss or injury caused to, another.
66 Am. Jur. 2d Restitution and Implied Contracts § 1, at 942 (1973). Sometimes the remedy is phrased in terms of preventing "unjust enrichment". Here, where the Court cannot find that a contract existed, but defendant retains the downpayment and an improved van, the unusual remedy of restitution is most appropriate.
Plaintiff received the benefit of the use of the van for four months. No evidence was offered at trial regarding fair rental values of similar vehicles. Therefore, the Court determines that one hundred dollars ($100) per month is a fair sum for the use of the van.
Defendant received one thousand dollars ($1,000) downpayment and two hundred eighty-five dollars ($285) in improvements to the van, for a total of one thousand two hundred eighty-five dollars ($1,285).
Therefore, it is the judgment of this Court that defendant shall pay to plaintiff the sum of eight hundred eighty-five dollars ($1,285 minus $400). The Court is aware that defendant may not be able to pay this sum at once; therefore, defendant shall have six months to satisfy the judgment, paying statutory interest of nine percent per year, computed at each payment, until paid.
So ordered the 24th day of November, 1989.
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