Heads Of Agreement Or Memorandum Of Understanding

An agreement may offer both parties, in the context of a transaction or partnership, that the common law jurisdictions are, however, confronted with this approach and that they continue to stick to the principle that a bargaining clause is not applicable. Over the past 15 years, there have been a number of cases that have challenged this idea, and the dynamics seemed to be moving in a more “commercial” direction. For example, Longmore LJ to Petromec ([2005] EWCA Civ 891) and Kirby P of Coal Cliff Collieries Pty Ltd found against Sijehama Pty Ltd ([1991] 24 NWLR 1), that the trading parties clearly had something in mind when they agreed to include a bargaining clause (this would be even more clearly the case if they had tried to explicitly designate it as a legally binding provision). Longmore LJ noted that deciding that negotiating an agreement “has no legal content … It is for the law to deliberately overcome the legitimate expectations of honest men.┬áIn his view, it is difficult for the law to “declare inapplicable a clause in which the parties had voluntarily and explicitly registered.” Kirby P. was prepared to declare that “provided there was a quid pro quo to the promise” (for example. B an exclusive plan or break fee), “a promise of good faith will be enforceable on its terms.” However, as all business lawyers know, it is a long-standing common law principle that “consent agreements” are not, by uncertainty, erected (see p.B. May- Butcher Ltd/R [1929] All ER Rep 679; Walford v Miles [1992] 2 AC 128). This principle is reflected in many court decisions in a number of jurisdictions, including England, Australia and Hong Kong. However, it is argued that a negotiation clause similar to the above example is not an “agreement of agreement” but rather an agreement between the parties to behave in a certain way over a certain period of time and that a negotiation clause thus has the potential to be implemented.

It is probably for this reason that such clauses continue to be contained in many draft documents. The second part, which has often been raised by the courts, is the argument that there is too much uncertainty about the rules of negotiation (see z.B. Watford v Miles).