Agreement to Agree: Unenforceable in Law
When negotiating your commercial terms, are you ever tempted to allow for the contract terms to leave possible eventualities open-ended, for example, having a clause that the parties will agree in due course what’s to happen in future?
If so, you should take a recent Court of Appeal ruling as a warning not to include anything that amounts to an ‘agreement to agree’ – otherwise you may find it will be legally unenforceable. An agreement to agree is a clause that the contractual parties will only agree that there would have to be a further agreement in the future.
As such, this is unenforceable. Though it may seem the best way to deal with potential uncertainties in future, it is not acceptable as far as the courts are concerned. But is it always clear whether an agreement to agree actually exists?
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