In the past, it could normally be expected, on the basis of previous case law, that an agreement would not be applicable because there was simply no contract. However, recent case law shows that courts carefully review each case to determine whether one party is liable to pay financial damages to the other party if agreements are necessary. The applicant, an oil tanker operator, concluded an option agreement with the defendant, a shipyard. The agreement granted the applicant three options, each concerning an order for four oil tankers. It provided that, in exercising an option, the delivery dates between the parties were “mutually agreed”, but the defendant “will do its best to have a delivery” in 2016 for Option 1 tankers and in 2017 for Option 2 and 3 tankers. It also provided that the parties would enter into shipbuilding contracts within ten days of the exercise of an option. The parties and their subsidiaries have also entered into other agreements, including four shipbuilding contracts, each ordering an oil tanker. In Teekay Tankers vs. STX Offshore & Shipbuilding  EWHC 253 (Comm), the High Court considered whether an options agreement for tanker construction was not concluded due to uncertainty. It is also advisable to include “full contractual clauses” in contracts. Those who have discussions with the parties with whom they have contracts should be careful, during negotiations that go beyond the terms of the agreement concluded, to give oral assurances, even if this agreement stipulates that the amendments must be made in writing. .
About Ethan 121 Articles
Post by EA Partners, LLC