Why'd a claimant be allowed to recover deposit if it acts in bad faith, when a contract obligated good faith and reasonable endeavour? Planned maintenance scheduled April 23, 2019 at 23:30 UTC (7:30 pm US/Eastern) Announcing the arrival of Valued Associate #679: Cesar Manara Unicorn Meta Zoo #1: Why another podcast?Contract tied to a non-refundable deposit if I don't signIf the defendant declines the plaintiff's counsel's request to give evidence, then how did the latter err?Can contract have a clause that changes the contractDoes intent affect whether or not repudiation or fundamental breach has occurred?Legal Extent of Non-Solicitation Obligation StatementIs it a breach of contract if there are loopholes in the contract?Contract: one party changes the terms after the other has become dependent on dealHow can laypeople investigate an airline's allegation of 'extraordinary circumstances'?London: how to deal with a landlord not protecting a deposit and not rembursing it?How does principle that written contract is proof of a contract and not the contract?
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Why'd a claimant be allowed to recover deposit if it acts in bad faith, when a contract obligated good faith and reasonable endeavour?
Planned maintenance scheduled April 23, 2019 at 23:30 UTC (7:30 pm US/Eastern)
Announcing the arrival of Valued Associate #679: Cesar Manara
Unicorn Meta Zoo #1: Why another podcast?Contract tied to a non-refundable deposit if I don't signIf the defendant declines the plaintiff's counsel's request to give evidence, then how did the latter err?Can contract have a clause that changes the contractDoes intent affect whether or not repudiation or fundamental breach has occurred?Legal Extent of Non-Solicitation Obligation StatementIs it a breach of contract if there are loopholes in the contract?Contract: one party changes the terms after the other has become dependent on dealHow can laypeople investigate an airline's allegation of 'extraordinary circumstances'?London: how to deal with a landlord not protecting a deposit and not rembursing it?How does principle that written contract is proof of a contract and not the contract?
O'Sullivan & Hilliard's The Law of Contract (Core Texts Series) (2018 8 ed). p. 83
4.29 A similar issue arose in a slightly different way in Shaker v Vistajet Group Holding SA
(2012). There, the claimant paid a deposit in respect of the purchase of an aircraft from
the defendant under the terms of a letter agreed by the two parties. The letter expressly
provided that the claimant agreed to proceed in good faith and to use reasonable endeavours to agree the formal sale contract and associated documents. The formal contract
could not be agreed, so the claimant sought repayment of the deposit, but the defendant
refused, contending that the claimant had not complied with its [1.] good faith and [2.] reasonable endeavour obligations. Teare J accepted that the intention of the agreement was that
the deposit could only be recovered if these obligations had been complied with, but
held that the obligations were unenforceable because of the impossibility of ‘polic[ing]’ them, that is, of working out whether they had been breached or not. It distinguished
p. 84
the Petromec decision on the basis that there were objective criteria available in that
case to assist the court in determining whether the obligation had been breached. It is
respectfully suggested that Teare J may have been too ready to find that the obligations
were unenforceable, as this [unenforceability of reasonable endeavour obligations] would have allowed the claimant to recover its deposit even if
it had acted in bad faith** (which on the facts it did not). There are many types of conduct
that everyone would agree constitute bad faith, so if the conduct fell into this category,
there would be no practical impediment to the court policing the obligation.
As the contract had the two obligations that I numbered on p. 43, I don't understand the emboldened sentence.
If the claimant acted in bad faith, then wouldn't it breach [1.]? If it did, then why would the unenforceability of reasonable endeavour obligations "have allowed the claimant to recover its deposit"?
contract-law england-and-wales
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O'Sullivan & Hilliard's The Law of Contract (Core Texts Series) (2018 8 ed). p. 83
4.29 A similar issue arose in a slightly different way in Shaker v Vistajet Group Holding SA
(2012). There, the claimant paid a deposit in respect of the purchase of an aircraft from
the defendant under the terms of a letter agreed by the two parties. The letter expressly
provided that the claimant agreed to proceed in good faith and to use reasonable endeavours to agree the formal sale contract and associated documents. The formal contract
could not be agreed, so the claimant sought repayment of the deposit, but the defendant
refused, contending that the claimant had not complied with its [1.] good faith and [2.] reasonable endeavour obligations. Teare J accepted that the intention of the agreement was that
the deposit could only be recovered if these obligations had been complied with, but
held that the obligations were unenforceable because of the impossibility of ‘polic[ing]’ them, that is, of working out whether they had been breached or not. It distinguished
p. 84
the Petromec decision on the basis that there were objective criteria available in that
case to assist the court in determining whether the obligation had been breached. It is
respectfully suggested that Teare J may have been too ready to find that the obligations
were unenforceable, as this [unenforceability of reasonable endeavour obligations] would have allowed the claimant to recover its deposit even if
it had acted in bad faith** (which on the facts it did not). There are many types of conduct
that everyone would agree constitute bad faith, so if the conduct fell into this category,
there would be no practical impediment to the court policing the obligation.
As the contract had the two obligations that I numbered on p. 43, I don't understand the emboldened sentence.
If the claimant acted in bad faith, then wouldn't it breach [1.]? If it did, then why would the unenforceability of reasonable endeavour obligations "have allowed the claimant to recover its deposit"?
contract-law england-and-wales
asked 4 mins ago
AntinatalistAntinatalist
1395
New contributor
Antinatalist is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
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O'Sullivan & Hilliard's The Law of Contract (Core Texts Series) (2018 8 ed). p. 83
4.29 A similar issue arose in a slightly different way in Shaker v Vistajet Group Holding SA
(2012). There, the claimant paid a deposit in respect of the purchase of an aircraft from
the defendant under the terms of a letter agreed by the two parties. The letter expressly
provided that the claimant agreed to proceed in good faith and to use reasonable endeavours to agree the formal sale contract and associated documents. The formal contract
could not be agreed, so the claimant sought repayment of the deposit, but the defendant
refused, contending that the claimant had not complied with its [1.] good faith and [2.] reasonable endeavour obligations. Teare J accepted that the intention of the agreement was that
the deposit could only be recovered if these obligations had been complied with, but
held that the obligations were unenforceable because of the impossibility of ‘polic[ing]’ them, that is, of working out whether they had been breached or not. It distinguished
p. 84
the Petromec decision on the basis that there were objective criteria available in that
case to assist the court in determining whether the obligation had been breached. It is
respectfully suggested that Teare J may have been too ready to find that the obligations
were unenforceable, as this [unenforceability of reasonable endeavour obligations] would have allowed the claimant to recover its deposit even if
it had acted in bad faith** (which on the facts it did not). There are many types of conduct
that everyone would agree constitute bad faith, so if the conduct fell into this category,
there would be no practical impediment to the court policing the obligation.
As the contract had the two obligations that I numbered on p. 43, I don't understand the emboldened sentence.
If the claimant acted in bad faith, then wouldn't it breach [1.]? If it did, then why would the unenforceability of reasonable endeavour obligations "have allowed the claimant to recover its deposit"?
contract-law england-and-wales
asked 4 mins ago
AntinatalistAntinatalist
1395
New contributor
Antinatalist is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
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O'Sullivan & Hilliard's The Law of Contract (Core Texts Series) (2018 8 ed). p. 83
4.29 A similar issue arose in a slightly different way in Shaker v Vistajet Group Holding SA
(2012). There, the claimant paid a deposit in respect of the purchase of an aircraft from
the defendant under the terms of a letter agreed by the two parties. The letter expressly
provided that the claimant agreed to proceed in good faith and to use reasonable endeavours to agree the formal sale contract and associated documents. The formal contract
could not be agreed, so the claimant sought repayment of the deposit, but the defendant
refused, contending that the claimant had not complied with its [1.] good faith and [2.] reasonable endeavour obligations. Teare J accepted that the intention of the agreement was that
the deposit could only be recovered if these obligations had been complied with, but
held that the obligations were unenforceable because of the impossibility of ‘polic[ing]’ them, that is, of working out whether they had been breached or not. It distinguished
p. 84
the Petromec decision on the basis that there were objective criteria available in that
case to assist the court in determining whether the obligation had been breached. It is
respectfully suggested that Teare J may have been too ready to find that the obligations
were unenforceable, as this [unenforceability of reasonable endeavour obligations] would have allowed the claimant to recover its deposit even if
it had acted in bad faith** (which on the facts it did not). There are many types of conduct
that everyone would agree constitute bad faith, so if the conduct fell into this category,
there would be no practical impediment to the court policing the obligation.
As the contract had the two obligations that I numbered on p. 43, I don't understand the emboldened sentence.
If the claimant acted in bad faith, then wouldn't it breach [1.]? If it did, then why would the unenforceability of reasonable endeavour obligations "have allowed the claimant to recover its deposit"?
contract-law england-and-wales
contract-law england-and-wales
asked 4 mins ago
AntinatalistAntinatalist
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