Pacific Hills Corp. v. Duggan

In Pacific Hills Corp. v. Duggan (1962) 199 Cal. App. 2d 806, the parties formed a joint venture to develop a parcel of land with residential units. As in this case, the agreement provided that the parties would enter into a second contract by which one partner would deed a second parcel of land to the partnership and the other partner would contribute $ 35,700 " 'for the purpose of developing and improving said property for sale.' " (Pacific Hills Corp. v. Duggan, supra, 199 Cal. App. 2d at pp. 807-808.) The court stated the general rule as follows: " 'The enforceability of a contract containing a promise to agree depends upon the relative importance and the severability of the matter left to the future; it is a question of degree and may be settled by determining whether the indefinite promise is so essential to the bargain that inability to enforce that promise strictly according to its terms would make unfair the enforcement of the remainder of the agreement. Where the matters left for future agreement are unessential, each party will be forced to accept a reasonable determination of the unsettled point or if possible the unsettled point may be left unperformed and the remainder of the contract be enforced. ' " (Id. at p. 809.) In Pacific Hills the parties were not in agreement concerning when the second parcel was to be deeded and the money paid. The court concluded it could not discern what a " 'reasonable' " date would be because the parties had a fundamental dispute concerning the effective date of the agreement based upon conflicting language contained in a letter setting forth the agreement in principle and in the contract itself. (Pacific Hills Corp. v. Duggan, supra, 199 Cal. App. 2d at pp. 808-811.) More importantly, the court held that the parties had not agreed upon how the property would be developed. Thus, according to the court, "the most essential part of the proposed joint venture was yet to be determined; namely, what to do with the acreage and money the parties agreed . . . to contribute to the joint venture; in other words, what was to be the venture?" (Id. at p. 812.)