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When selling stuff on TradeMe, one way of specifying shipping options is "To be arranged". That is, seller can skip researching shipping options/costs and only worry about it once the item is contractually sold. This is made clear to the buyer.

Essentially, buyer and seller enter a contract without specifying shipping terms. They only agree to "arrange shipping" (or, at least, attempt to).

It will not be uncommon that, when making such arrangements, the buyer realises that shipping costs are too high for them. Or, the buyer wants the seller to use a courier service which is impracticable for them to use. Then, if the parties agree to rescind the contract, they do so. Happy days.

But what if one party does not want to rescind and insists on performance?

Can such a contract be discharged by frustration or another similar way?

  • 1
    Well, you make it sound like the sale contract is complete before the shipping discussion begins. If so then I presume the item belongs to the buyer and it is her problem to figure out how to get it. If all else fails she can come to the seller's location and pick it up. Or, if she decides she no longer wants it, she can try to negotiate with the seller for a new contract where the seller buys it back, maybe at a discount. – Nate Eldredge Sep 17 at 1:21
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There is no contract

Specifically, an agreement to agree is void for uncertainty.

If the total cost of shipping was an insignificant fraction of the value of the contract then there might be sufficient certainty - that is, it could be argued that the buyer (or seller) has agreed to pay a reasonable rate for shipping. However, in the context of most items on the site this is unlikely to be the case.

As an aside, your use of the term "rescind" is incorrect. Rescission occurs when one party breaches a term of the contract and the other party elects to terminate (and optionally seek damages) in response. The correct term for both parties agreeing to release the other is "termination by agreement".

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If both you and your buyer are in the US, then the Uniform Commercial Code §2-305, adopted by all fifty states in the US, likely applies to your situation because the predominant purpose of the contract is likely sale of goods. Assuming that "arrangement" means later negotiation between the buyer and seller, and both the seller and buyer intend to be bound, the highlighted text may apply to your scenario in the question:

§ 2-305. Open Price Term.

(1) The parties if they so intend can conclude a contract for sale even though the price is not settled. In such a case the price is a reasonable price at the time for delivery if

   (a) nothing is said as to price; or

   (b) the price is left to be agreed by the parties and they fail to agree; or

   (c) the price is to be fixed in terms of some agreed market or other standard as set or recorded by a third person or agency and it is not so set or recorded.

(2) A price to be fixed by the seller or by the buyer means a price for him to fix in good faith.

(3) When a price left to be fixed otherwise than by agreement of the parties fails to be fixed through fault of one party the other may at his option treat the contract as cancelled or himself fix a reasonable price.

(4) Where, however, the parties intend not to be bound unless the price be fixed or agreed and it is not fixed or agreed there is no contract. In such a case the buyer must return any goods already received or if unable so to do must pay their reasonable value at the time of delivery and the seller must return any portion of the price paid on account.

Note that the official comment explicitly states that this article rejects the notion that "an agreement to agree is unenforceable" for situations that fall in subsection (1):

Official Comment

  1. ... This Article [Chapter] rejects in these instances the formula that "an agreement to agree is unenforceable" if the case falls within subsection (1) of this section, and rejects also defeating such agreements on the ground of "indefiniteness". ...

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