Striving To Enter Agreement

In Teekay Tankers vs. STX Offshore & Shipbuilding [2017] EWHC 253 (Comm), the High Court considered whether an options agreement for tanker construction was not concluded due to uncertainty. In Astor Management, the Tribunal rejected the Dany Lions approach because that decision indicates that it is difficult to meet the security requirements of the objectives and sufficient objective criteria and is generally not met when an endeavour clause is agreed with a third party. On the contrary, such a clause should almost always be applicable. The Tribunal found that its role in a commercial dispute was to give legal effect to what the parties had agreed to and not to refuse it because the parties had not made it an easy task. It would be the Court`s last resort to find that a clause is too uncertain to be applicable. The court then turned to the issue of implied conditions. He viewed the governing authorities under implied conditions, including Marks and Spencer, where the Supreme Court confirmed that an implied provision (to a reasonable reader at the time of entering into the contract) must be sufficiently obvious to be obvious or necessary for commercial efficiency. The court decided that despite the « greatest possible ambition, it was not able to imply either of the two terms.

It was found that the first implied provision « offer date » would function as a « unilateral » contractual system, i.e. the claimant would have to accept any delivery date that the defendant was able to offer in the best possible way. This regime, every hour, with the determination of the option agreement which provides that the delivery dates are agreed by mutual agreement. It found that the second, the implied period of the « reasonable date », would be incompatible with the defendant`s obligation to « do everything possible » to provide in the years 2016 or 2017. The Tribunal held that those criteria could never be met in a case where it was a future agreement with the other party. If the subject matter was a future agreement with a third party, the criteria could be met, but these cases are probably exceptional and the essential conditions for the future agreement with the third party should probably be identified in advance. If the terms of the future agreement were left open for negotiation, the clause would probably not be applicable, as there are insufficient objective criteria to assess the relevance of the efforts. On this basis, the Tribunal found that the Dany Lions clause was too uncertain to be applicable, as the parties had left open the question of price and other conditions. The applicant, an oil tanker operator, concluded an option agreement with the defendant, a shipyard. The agreement granted the applicant three options, each concerning an order for four oil tankers. It provided that, in exercising an option, the delivery dates between the parties were « mutually agreed », but the defendant « will do its best to have a delivery » in 2016 for Option 1 tankers and in 2017 for Option 2 and 3 tankers. It also provided that the parties would enter into shipbuilding contracts within ten days of the exercise of an option.

The parties and their subsidiaries have also entered into other agreements, including four shipbuilding contracts, each ordering an oil tanker. The agreement to sell Bristol Rovers and Sainsbury`s to purchase was subject to the condition that Sainsbury`s obtain an acceptable building permit by a specified date. The contract required Sainsbury`s to do everything in its power to obtain an acceptable building permit as quickly as possible. The contract also contained detailed provisions specifying when Sainsbury`s was to appeal a planning decision. . . .