1、 What is a quantity undetermined contract

Quantity undetermined contract, It refers to a contract in which the parties agree that the quantity is temporarily undetermined at the time of contract formation, but can be determined through certain means during the performance of the contract (such as the output of the supplier, the requirements of the demander, etc.). Different from technical reasons such as improper language, inability to measure, or negligence of the parties in not making an agreement on quantity terms, the total payment in a quantity undetermined contract is gradually clarified during the performance of the contract, and the variable of time plays a crucial role in it.

In the practice of commercial trade contracts, with the continuous development of the social economy, the use of contracts with undetermined quantities has become normalized. This form of contract, which is not recognized in the field of classical contract law due to the lack of necessary elements, can effectively respond to the practical needs of modern commercial and trade subjects for flexibility in transaction relationships. The quantity undetermined contract provides an open agreement on quantity clauses, which not only maintains a long-term trust relationship between the contracting parties, but also provides a space for renegotiation and adjustment in response to market changes and transaction risks, and is widely favored by the parties.

2、 Quantity to be determined. Is the contract established

Regarding the establishment and effectiveness of contracts with undetermined quantities, the Contract Law emphasizes the strict adherence to the certainty of contract content. This spirit is reflected in judicial practice, where some courts believe that the establishment of a contract should be based on the specific determination of essential clauses.

Taking the current legislative documents and relevant judicial interpretations of China's Contract Law as an example, although Article 12 of the Contract Law provides a list of eight general terms of the contract, it does not specify which ones are essential terms of the contract. Therefore, judgments with traditional views often cite the relevant provisions of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the Contract Law of the People's Republic of China (II) to determine that contracts with undetermined quantities are not established. The first paragraph of Article 1 of this judicial interpretation stipulates:

If there is a dispute between the parties regarding the establishment of a contract, and the people's court is able to determine the names or titles, subject matter, and quantity of the parties, the contract should generally be deemed established. Except as otherwise provided by law or agreed upon by the parties.

This conclusion may seem to have sufficient legal basis, but it is difficult to withstand logical scrutiny and practical tests.

Firstly, logically speaking, 'a contract that can determine the parties, subject matter, and quantity is considered established' only indicates that the determination of the above three clauses is a sufficient condition for the establishment of the contract, and cannot prove that it is a necessary condition for the establishment of the contract. It is worth further discussing whether it is appropriate to simply apply the reverse reasoning rule here.

Secondly, from the perspective of achieving the purpose of the contract and contract justice, the parties in a contract with undetermined quantity terms did not disregard the quantity terms when entering into the contract. They only considered multiple factors such as contracting costs and market changes, and did not fix the quantity at the time of contract conclusion. If such a contract is attributed as not being established, it is undoubtedly a deliberate avoidance of the complexity of contractual relationships in the market economy environment, and it may be difficult to adapt to the changing practical needs.

In the author's opinion, contracts with undetermined quantities are not invalid due to the absence of key clauses, possess the basic certainty required for the formation and effectiveness of the contract, and meet the requirements of the principle of equivalence between rights and obligations. Whether in judicial practice or academic discussions, the fact of the establishment and effectiveness of contracts with undetermined quantities should be recognized on the basis of sufficient explanation. This contract form, which originates from commercial demand and acts on market practice, has been widely recognized and practically applied by the parties involved. The stability of the market, especially the maintenance of long-term trading relationships, plays an important role and is the result of the game and reconciliation between contract certainty and openness.

Undoubtedly, behind the various advantages of contracts with undetermined quantities, there are also risks and possible problems that cannot be ignored. However, these risks and problems do not deny the reasons for their effectiveness. Instead, the performance standards and breach remedies should be standardized to avoid the abuse of contracts with undetermined quantities. While the original intention of the parties can be achieved, the principle of good faith and trustworthiness should also be protected from being violated.

3、 How to determine the quantity of pending contracts

The quantity of the contract is temporarily undetermined at the time of its conclusion, but the contract itself is based on the free agreement of the parties, and its quantity determination belongs to the scope of agreement determination. Therefore, the determination of the number of contracts with undetermined quantity is a return to the agreement made in the form of contract text when the parties signed the contract.

Specifically:

Step 1: Review the scope of the contract agreement

For contracts with a minimum or maximum quantity agreed upon, it is generally believed that a relatively clear range of contract quantities has already been determined. Regardless of how the transaction environment changes during the performance of the contract, the minimum and maximum values already agreed upon in the contract should not be exceeded. However, on the basis of not exceeding the agreed scope, how to determine the quantity still needs to be specified according to the actual situation.

Step 2: Respect and renegotiate the agreement

For contracts with a blank quantity to be negotiated, the parties have reserved space for further negotiation and determination of the contract quantity at the time of signing, clearly expressing their agreement that the second level of parties should renegotiate as a way to determine the quantity, which should also be respected.

Step 3: Comprehensive consideration of estimation and reality

For contracts with estimated quantities and actual settlement quantities to be determined, the estimated values can serve as important reference for contract performance, parties' renegotiation, and contract interpretation. However, as the parties have agreed that the quantity shall be based on actual demand, it is not possible to choose either estimated or actual quantity as the basis for determining the quantity. Instead, a comprehensive consideration must be given to both. In this case, still strictly determining the quantity according to the open terms of the contract may result in vague determination criteria due to unclear agreements or contradict the principle of fairness in the performance of the contract.

Therefore, when the parties involved have disputes over changes in transaction conditions or the determination of the agreed upon method, they can engage in new negotiations and games based on more timely and complete information.