Provisions of a contract or covenant that attempt to restrict the use of property, when their material terms are uncertain, ambiguous, or are left to future negotiations may render them incomplete unenforceable agreements to agree.  An analysis of the enforceability of such restrictive covenants proceeds on the fundamental principles that (1) the owner of real property has the right to its free and unrestricted use, unless the use is expressly limited by law or by a valid, enforceable covenant or contract, and (2) a person who seeks to enforce such restrictions on use has the burden of proving the existence of a valid restriction.  Oberhansly v. Earle, 572 P.2d 1384, 1386 (Utah 1977).  Whether a restriction is an enforceable covenant is a question of law for the court to determine.  John Deere Co. v. A & H Equipment Inc., 876 P.2d 880, 883 (Utah App. 1994).  

 

If a contract or covenant, for example, contains language such as: “If the parties are unable to agree in writing upon mutually acceptable terms…” relating to a restriction on use, or requires future negotiations between the parties to establish mutually acceptable terms for the restriction, such a provision is invalid and unenforceable.  The Utah Court of Appeals, quoting the Utah Supreme Court in Candland v. Oldroyd, 248 P. 1101 (Utah 1926) held that “so long as there is any uncertainty or indefiniteness, or future negotiations or considerations to be had between the parties, there is not a completed contract.  In fact, there is no contract at all.”  Prince, Yeates & Geldzahler, v. Young, 2004 UT 26, ¶17 94 P.3d 179.  Whenever the parties state their intent to further negotiate the terms of an agreement, such “… a manifestation of willingness to enter into the agreement is only preliminary and does not demonstrate the existence of a binding contract.”  Homestead Golf Club, Inc. v. Pride Stables, 224 F.3d 1195, 1220-1201 (10th Cir. 2000).  Finally, in Sackler v. Savin, 897 P.2d 1217, 1220-1222 (Utah 1995), the Utah Supreme Court affirmed the fundamental principal that to form an enforceable contract, there must be a meeting of the minds on all essential terms.  Consequently, if parties desire to have an enforceable contract or an enforceable covenant between them restricting the use of property, all essential, material terms must be agreed upon and must not be left to future negotiations.