In this article, which follows our earlier update of the case, we examine the effects of the recent Court of Appeal case of Morris/Swanton Care – Community Ltd (Morris),2 in which the applicant sought to avail himself of a contractual option to provide additional services for “such a long period, which reasonably must be agreed upon,” as the basis for an action for damages. Finally, a number of wording points can be drawn from the judicial treatment of the agreements to be agreed upon. While such agreements may be commercially attractive, the question of whether or not they are legally applicable is quite another. It usually arises when one party decides not to proceed with the next phase of the undertaking and the other claims to have suffered one or more damage as a result of that decision. There is no concept of “one size fits all” that the courts can invoke, as they will make their decision on enforceable force on the basis of their interpretation of the agreement as a whole. However, if a clause gives the parties the opportunity to accept or object at a later date, whether reasonable or not, the parties should consider that the courts will apply such a clause only slowly. The parties are often under pressure to reach an agreement quickly and can therefore use a later agreement to “achieve the agreement”. Morris illustrates the risks associated with this approach and how saving time in development can lead to costly legal disputes that can be extremely troublesome for a company, especially if the party wants to rely on the concept in question. Courts will be even more inclined to enter into an agreement in which the contract provides for a mechanism (for example. B expert disposition) or objective criteria (for example. B, fairness or adequacy) to resolve uncertainty.9 If the mechanism indicated “collapses” or if the courts conclude that the true intent of the parties, although not explicitly specified, was to resolve disputes on the basis of objective criteria. 10 The use of the word “option,” which means a right as opposed to a service-providing obligation, did not help the complainant because it was still too uncertain to be applied. The Court of Appeal also found that the word “reasonable” had been used to dictate how the parties should reach an agreement and not to compel them to a reasonable period of time.
In addition, the factors identified by the applicant to assist the Tribunal in assessing the period were all economic factors that the parties, not the Tribunal, had to consider in their hearings. Therefore, even if the deadline had required the parties to agree on an appropriate extension, this would not have been applicable in the absence of an objective reference criterion in the GSO (or in the completion of the initial period) until the extension period would be set. In any event, the courts decide on their own facts. They are, however, hesitant to consider as null and void a clause that should be “legally valid”, particularly if one of the parties has benefited from the partial benefit or has reduced it to the contract.5 A clause is therefore not applicable, simply because it requires additional agreement from the parties, if the courts can resolve the uncertainty. B, for example: in these circumstances, the original contract will often include a provision that the parties indicate that they intend to obtain a new agreement. the future. Sometimes these provisions define detailed mechanisms for this purpose, whereas sometimes they can only be one or two sentences. This approach buys the parties time to build trust, develop the products or processes that are marketed on the line, and establish the reasons and commercial conditions for each subsequent engagement.