Unfinished Music and “Unfinished” Contracts
Two famous composers, Wolfgang Amadeus Mozart and Franz Schubert, died in Vienna while still in their thirties. Mozart died in 1765 at 35, and Schubert died in 1828 at 31.
Both Mozart and Schubert died leaving unfinished work. Mozart and Schubert undoubtedly are not the only composers to have left unfinished work at their deaths. But Mozart’s and Schubert’s unfinished works were not forgotten. Mozart’s Requiem (which another composer finished after Mozart's death) and Schubert’s “Unfinished” Symphony are staples in the classical music repertoire.
In the fourth season of Amazon’s original series, Mozart in the Jungle, the musical conductor is asked to conduct a completed version of the requiem. And, on February 4, 2019, the “Unfinished Symphony” was performed at London’s Cadogan Hall.
These performances, one fictional and one real, both feature music completed using artificial intelligence (AI). In both instances, a computer received data about the composers’ music. The computer then used that data to predict how they might have completed the compositions.
Music isn’t the only thing that might not be finished. Contracting parties sometimes fail to “finish” their contracts by assembling completed contracts. They may exchange signature pages but never attach them to the legal document. Or, they may sign a contract with blanks or that references an exhibit which isn’t attached.
Contracting parties and the courts don’t (yet) have AI to aid in finishing their contracts. Instead they must rely upon rules of contract construction to aid them in interpreting an incomplete contract.
How Parties Can “Finish” an Unfinished Contract
The easiest way to “finish” an incomplete contract is when the parties agree how the contract is to be completed. There are three main ways parties might do this: amendment/addendum, ratification, and action.
The best approach if the amendment/addendum approach, where the parties sign a written document agreeing on the missing contract provisions. Whether the written document is an amendment or an addendum depends upon what is missing from the original contract. Some attorneys prefer an addendum over an amendment or vice versa. The most important thing is that the parties sign a written document clarifying the contract language, regardless of what that document is called.
The differences between an amendment and addendum are subtle. An addendum adds additional information to an existing legal document. An amendment changes the existing legal document.
When the missing information supplements, but does not change the core agreement, an addendum should suffice. This might occur if the contract is missing an exhibit containing the legal description of real estate for which the street address is already added or is missing notice addresses for the parties.
Where the missing language changes the original contract, an amendment is more appropriate. This might occur where an exhibit listing the property the buyer is purchasing is omitted, or where the contract includes a blank for the purchase price or critical times for contract performance.
Ratification is another way that the parties can “complete” a contract. Ratification is an after-the-fact approval of a legal document. It is most appropriate where one or both parties have not signed the contract.
Ratification also is appropriate where the parties exchanged signature pages, but those pages aren't attached to the contract. Ratification may consist only of emails in which the parties consent to attach their signature pages to a specific form of the contract.
Parties also can “finish” an uncompleted contract by their actions. The parties have a meeting of the minds and perform the contract. They may never realize that the contract was incomplete.
Finishing a contract by action of the parties works fine – until the parties no longer agree. When a disagreement arises, the parties look to the contract to resolve their differences, only to learn that the contract is “unfinished.” There may not be a signed version of the contract. Or, the address to which default notices are to be sent may be blank.
What Happens if the Parties Don’t Agree How to “Finish” the Contract?
By the time the parties learn their contract is “unfinished,” the relationship may be in jeopardy. Under those circumstances, the parties aren’t likely to agree on how to “finish” the contract. They are forced to rely upon contract interpretation principles or legal “gap fillers” to determine their respective obligations.
In Determining a Composer’s Message and a Contract’s Meaning, I noted the first concept in contract interpretation is the “four corners rule.” If the contract within the four corners of the written page is clear, then that is the interpretation that is used.
Under the four corners rule, what the parties intended to say does not matter if the contract, itself, is clear. However, since an incomplete contract isn’t clear, the four corners rule does not apply.
Related to the four corners rule, the parol evidence rule provides that extrinsic evidence can’t be used to explain an unambiguous contract. However, if the written contract is ambiguous, then extrinsic or “parol” evidence, such as the parties’ prior discussions, may help determine what the parties intended.
An incomplete contract may be ambiguous. So, it may be important to look at the parties’ communications to understand how they intended to complete the contract.
Sometimes, it’s easy to determine the parties’ intentions. If the contract is missing a signature, emails distributing a “final” version of the contract followed shortly after by a signed signature page might show the parties intended their signatures to be attached to the “final” version. If a real estate contract includes the street address for the property but omits the legal description, the parties can obtain the legal description from county records.
Other times, the parties’ intentions may be may not be clear. It may be necessary to look beyond written communications about execution of the contract.
Fortunately, parol evidence is not the only way to find the parties’ intentions when a written contract is incomplete. How the parties act after signing the contract can provide clues as to what they thought they were agreeing to. This is called the “course of performance.”
If, for instance, a real estate purchase contract is missing an exhibit listing the items the seller is to provide for the buyer’s due diligence, the materials the seller actually provides (and which buyer accepts without objection) provide evidence that the parties intended the exhibit to contain those items.
If the parties have had many contracts together and have a business history together, performance under previous contracts may help determine missing contract terms. The parties’ actions over several business endeavors is a “course of dealing.”
Finally, for certain types of contracts, there are legal “gap fillers,” statutes that may help complete a contract. The Uniform Commercial Code includes default provisions which apply when a contract is silent. State limited liability company ("LLC") acts determine terms missing from the LLC agreement.
Restatements of law, while not legally binding, may help the parties to interpret “unfinished” contracts. Less frequently, the state may have case law, which expressly states how a contract is to be completed under certain circumstances.
Don’t Leave Contracts Unfinished
Since composers frequently have multiple musical works in progress, it may be inevitable that composers leave “unfinished” compositions behind when they die. The same is not true for contracts.
Contracting parties can prevent “unfinished” contracts by reviewing their contracts before beginning performance. By quickly scanning the contract, the parties can confirm there are no blanks in the contract and that the contract is signed. A more thorough reading might be necessary to confirm that all exhibits and schedules are attached to the contract. That thorough reading is important anyway, so the parties understand their obligations.
Steven Covey said, “If there is one thing that is certain in business, it is uncertainty.” Contracting parties may not know what the future holds for their business dealing. However, they should not add to that uncertainty by leaving their contracts “unfinished.”
© 2019 by Elizabeth A. Whitman
Any references clients and their legal situations have been modified to protect client confidentiality
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