The idea that an agreement is a valid contract may be supported by some, but the fact is that, in the eyes of the law, consent to future conditions that are not secure is not sufficient to enter into a legally enforceable agreement. Therefore, an agreement that can be reached remains an unenforceable agreement that only implies the link between two parties and a future agreement, but does not guarantee it. The use of the word “option,” that is, a right contrary to the obligation to provide, did not help the applicant, who was still too uncertain to apply. 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. There are several important takeaways for anyone who wants to make sure their approval is enforceable in the future. Therefore, remember that the case law has identified a number of key indicators to determine whether an agreement is an agreement that can be reached – and that is not applicable. The Tribunal noted the distinction between an agreement that uses the best efforts to achieve a given outcome and an agreement to leverage the best efforts to reach agreement on an essential clause of a contract. He found that the option agreement fell into the latter category. He also briefly referred to the nature of an “essential issue.” In the case of the MRI business, a matching plan had been agreed between the parties; the Court of Appeal upheld an unspoken clause that the shipping plan was appropriate.
The Commercial Court considered that a shipping plan was a “routine matter” and that shipping plans had been agreed in the MRI trade in each of the previous two years (i.e., easy to evaluate). Furthermore, in this case, delivery dates are essential and are not easy to assess, as no criteria have been defined and there are many relevant considerations for agreeing to a delivery date. The applicant, an oil operator, entered into an option contract with the defendant, a shipbuilder. The agreement gave the applicant three options, each for an order for four tankers. It provided that, in the event of an option exercised, delivery dates between the parties would be “agreed upon by mutual agreement,” but the defendant “will do its best to have a delivery” in 2016 for Option 1 and 2017 for The Two and Three Tankers. It also provided for the parties to enter into shipbuilding contracts within 10 days of the exercise of an option.