Latest news

« »

Friday, 2 May 2014

Never agree to agree

In  Dany Lions Ltd v Bristol Cars Ltd [2014] EWHC 1924 (QB) (01 May 2014)  the court had to consider matters arising from an earlier case (no report available as far as I can see although the story is here in the Telegraph), in which the judge found against Bristol, who had entered into a contract to carry out work on a 405D which went so far as to make it into a convertible and to install an automatic transmission - described by one enthusiast as 'the two worst things you could do to that car' (see the comments on A price was - er - mentioned but Bristol, which had been bought out of administration a few years ago, later insisted it was only an estimate, and anyway they found themselves unable to carry out the work because of a lack of skilled labour and the fact that the car was never designed to take a 'slushbox'. The owner, a solicitor (of course! although that statement involves piercing a corporate veil and working out a simple anagram) had the work carried out elsewhere, pursuant to a settlement agreement, and sued for the extra cost.

The settlement agreement itself illustrates an important principle. It provided for the owner to use reasonable endeavours to find another restorer willing to do the work, by a specified date. At trial, one issue was whether this was enough to create a legal obligation, because the owner narrowly missed the date. It was central to the question of whether damages could be recovered. The High Court held that as long as the object of the endeavours could be ascertained with enough certainty and there were sufficient objective criteria by which the court could evaluate whether performance of the obligation should be fulfilled, an obligation to use reasonable endeavours could be enforced: but certainty could not be established if the object was a future agreement - if matters had been left open for future negotiation - the necessary certainty was lacking, because the parties may have had differing views of what was to be performed when the time came to negotiate. The High Court decided that, as parts of the agreement had been left open for future negotiation, it had no objective criteria against which to judge whether enforcement or refusal to comply with the term was reasonable in the circumstances. Because it was too uncertain to give rise to enforceable obligations the owner was entitled to damages for breach of contract.

The High Court claim was settled by a consent order on terms under which execution was stayed pending Bristol trying to get the Court of Appeal to entertain an appeal, for which the judge had refused to give leave.If the claimant wanted to enforce the judgment it had obtained, it had to give at least seven days' notice. There was a bit of an argument about whether this had in fact been done, but in the end the judge ordered the defendants' solicitors to hand over the money which was in their client account, but stayed pending the Court of Appeal's decision on whether to allow the appeal to proceed.

No comments:

Post a Comment