An important matter has just been decided, potentially involving any business negotiation. In Copeland v. Baskin Robbins, 02 C.D.O.S. 2533 (March 19, 2002), Baskin Robbins and Copeland began negotiating Basque Robbins to sell one of their ice plants in Copeland. The agreement depended on baskin Robbins agreeing to purchase ice-subcontracting products produced in that country, commonly known as the „co-packaging“ agreement. In a mail-order agreement, Baskin Robbins set the terms for the sale of the plant and agreed to proceed „subject to a separate agreement on co-packaging and negotiated pricing.“ Copeland signed this correspondence agreement. Two months later, Baskin Robbins abruptly halted negotiations on the co-packing agreement due to a change in the company`s strategy. As Copeland claimed that it was a „deal breaker“ for its purchase of the facility, this contract was also terminated. Copeland sued Baskin Robbins for violating its agreement to negotiate the co-packing agreement. Surprisingly, Copeland filed a complaint only for his „damage to expectations… in the form of a loss of earnings, a loss of jobs and a breach of his reputation. The indicators on which the parties agree are: a common principle in the agreements is an „agreement that negotiates in good faith.“ This topic was first addressed in Deal or No Deal: Do you have a Duty to Negotiate in Good Faith? Discussed, as published in the April 2012 issue of Commercial Litigation Update. In this article, which follows our earlier update of the case, we examine the effects of the recent Court of Appeal case of Morris/Swanton Care – Community Ltd (Morris),2 in which the applicant sought to avail himself of a contractual option to provide additional services for „such a long period, which reasonably must be agreed upon,“ as the basis for an action for damages.
Finally, a number of wording points can be drawn from the judicial treatment of the agreements to be agreed upon. The idea that an agreement is a valid contract can be supported in practice to minimize this risk, where flexibility is required and a significant trade clause cannot be established at the time of the contract, if the parties contain provisions that operate late with the parties. In the first appeal, the High Court found that the applicant had an enforceable right to counselling services for the first four-year period, but was not entitled to do so for another period. The obligation on the parties to agree on the length of an additional period was not applicable, as it was an agreement that did not contain a „mechanism“ or „objective standard“ for the Tribunal to „conclude“ on the duration of the extension. 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. The court found that, despite an „extreme effort,“ it was unable to submit either clause. He found that the first, the implied „offer date,“ would function as a „unilateral“ contractual system, i.e. the applicant had to accept any delivery date that the defendant could offer with its best efforts.
This regime would be contrary to the provision of the option agreement which provided for an amicable agreement.