Agreement To Agree Is A Valid Contract
There are cases in commercial agreements where a formal and binding agreement implemented by the parties contains certain clauses obliging the parties to negotiate in good faith the settlement of disputes or disputes that may arise between them during the performance of the contract before resorting to arbitration or litigation. Such a good faith clause was described as enforceable by the English court in WN Hillas & Co v Arcos, where Lord Wright stated that parties to a contract who weighed good consideration could engage in a duty of good faith. However, the English Court of Appeal rejected Lord Wright`s statement in Hillas vs Arcos that parties to a contract who provided good consideration could agree to negotiate in good faith. The complainant pointed out that the expression used in the BSM SPA (i.e. «has the choice») was mandatory. The defendant argued that it was not required to grant an extension to the applicant, as the provision was a non-binding agreement. The defendant also argued that, even if it was not required to react reasonably to the extension proposed by the applicant, it had in any event acted reasonably in refusing it. The applicant initiated the procedure in April 2014. It argued that the defendant had rejected and abandoned the option agreement and that it had the right to terminate and terminate that agreement.
It claimed damages for the loss of profits. The defendant argued that the option agreement was not concluded because of the uncertainty of its conditions. .