---
title: "More on Contracts: Formation of a Construction Contract"
description: does price on a contract matter?
image: https://www.gallatin-law.com/hubfs/Canva%20images/Canva%20Design%20DAFs89CAK6M.png
---
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08/29/2023
# More on Contracts: Formation of a Construction Contract
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Contracts are just so beneficial...and problematic that it warrants being a regular topic here. The issue today: what if a construction contract does not specifically state a price; does that defeat the existence of a contract? Usually the answer is Yes, but there are circumstances where the answer is No.
“[T]he law does not favor the destruction of contracts because of indefiniteness, and
if the terms can be reasonably ascertained in a manner prescribed in the writing, the contract
will be enforced.” *King v. Dalton Motors, Inc.*, 109 N.W.2d 51, 53 (Minn. 1961) (footnote
omitted). But a contract is void if it is so vague, indefinite, or uncertain that the contract’s
meaning and the parties’ intent is left to speculation. *Id*. at 52. Therefore, a “purported
contract is fatally defective” if “substantial and necessary terms are specifically left open
for future negotiation.” *Id*. “When the parties know that an essential term of
their intended transaction has not yet been agreed upon, there is no contract.” *Malevich v.*
*Hakola*, 278 N.W.2d 541, 544 (Minn. 1979).
How you arrive at a contract without a pricing element (usually a substantial and necessary term) is you identify something like "Per insurance scope." But, if you don't include specific items like profit and overhead and the insurer does not pay that, the contractor is out of luck generally.
The best case scenario is to list a price, supplemented by a "per insurance" clause. Then, add Change Orders so both the homeowner and contractor are, literally, on the same page.
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## [Dan Gallatin](https://www.gallatin-law.com/blog/author/dan-gallatin)
Dan is a lifelong resident of Minnesota. Born in St. Paul, Dan spent many of his formative years growing up there before moving to White Bear Lake. After graduating from White Bear Lake, Dan spent four glorious years at the University of Wisconsin-Madison, earning a degree in two majors. Dan worked as a Senior Investigator at the Minnesota Department of Commerce for several years after graduating from college. During his final years Dan attended William Mitchell College of Law while still working full-time. During this exhausting 3 ½ year period Dan honed his skills in becoming an efficient, to-the-point legal practitioner. While at Madison Dan met his wife, Tonya, and together they moved to Minnesota to plant their roots. Dan and Tonya have two amazing, unique children and reside in Hugo.
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