Option Agreements Are Unenforceable

The Commercial Court has reviewed the principles of the agreements to be concluded by the main appelal courts of Mamidoil-Jetoil Greek Petroleum and B J Aviation. One of the fundamental principles that flow from these decisions is that if, in the event of an actual construction of a contract, the parties have reconciled a critical issue in the future (such as the price in a contract for the sale of goods or the provision of services), it is likely that the contract will not be applicable due to uncertainties. Decisions are also taken in favour of the proposition that, if it is satisfied that the parties intend to implement their agreement, the Tribunal should endeavour to implement that intention through the construction or application of a clause. However, the implied clause cannot be inconsistent with the Tribunal`s conception of explicit contractual terms. Since the options are future property orders, they are generally subject to duration in common law countries and must be exercised within the statutory time frame. The parties here may have been very willing to have the option contract and the loan agreement read in parallel. It`s a good thing for business. But they did not take the opportunity to make it clear in the documents themselves. Since the terms of the agreements do not justify the intention that the option agreement and the loan agreement constituted a single agreement, that the financing of the loan was a counterpart to the option agreement, or that the financing of the loan was a precondition for the exercise of the option, the Tribunal rejected the defendant`s request to cancel the option agreement on the basis of the applicant`s alleged default on the loan financing.

Second, who is the option e? In an option contract, the seller is the option giver and the buyer the option man. It is a one-sided contract that the seller is obliged to sell, but the buyer has the option to buy. At the time of establishment, an option contract is a unilateral contract. But if the buyer exercises the option, it will be a bilateral contract. The court then turned to the question of implied conditions. It considered the governing authorities to be on unspoken terms, including Marks and Spencer, in which the Supreme Court confirmed that a tacit clause (for a reasonable reader at the time of the contract) should be so obvious that it is obvious or necessary for commercial effect.