Morris confirmed the principle that general standards that prescribe how parties try to agree on conditions such as. B “best efforts” or “best efforts” do not make an agreement enforceable.12 This is an important explanation of the court`s current direction in this regard and is a timely reminder that each case will use its particular circumstances. , particularly with respect to the Tribunal`s assessment that an express obligation in a contract to make every reasonable effort to reach an agreement with a third party is enforceable.13 The applicant commenced proceedings and asserted that he was entitled to “an additional period of time during which additional remuneration must be paid under the GSO. The applicant pointed out that the wording used in the GSO (i.e. “having the opportunity”) was binding. The defendant argued that it was not required to grant an extension to the applicant, since the provision is a non-applicable agreement and an agreement must be reached. The defendant also argued that, although it was not required to react reasonably to the extension proposed by the applicant, it had in any case acted reasonably in rejecting it. 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.
Courts use objective scrutiny to determine whether there is a binding contract, checking (i) whether the contract is secure enough to be enforceable and (ii) whether a “reasonable man” would say that the parties want to be subject to an agreement and establish legal relationships.4 Morris is a useful reminder that, when it comes to agreement agreements, Morris a useful reminder is when it comes to agreements. , the courts distinguish between: in these circumstances, the original contract will often include a provision that the parties indicate that they intend to enter into a new agreement in 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. In the first appeal, the High Court found that the applicant had an enforceable right to counselling services for the first four-year period, but was not entitled to do so for another period. The obligation on the parties to agree on the length of an additional period was not applicable, as it was an agreement that did not contain a “mechanism” or “objective standard” for the Tribunal to “conclude” on the duration of the extension.