An Agreement To Agree Is Not Enforceable


    If the negotiations stop, it can be tempting to call it one day and leave some important terms unresolved or in the air. But as the Delgardo case shows, even if the parties have agreed on some key conditions, a party that tries to impose an incomplete treaty will face a bitter struggle. Of all the types of projects that may remain unfinished, contracts should not be contracts. Bogue is an important warning to the parties that, although they have not agreed on all the terms of the contract, they may nevertheless have entered into a binding agreement if the main terms have been agreed. Even something as important as the inclusion of releases can be incorporated a posteriori into a contract. In accordance with usual business practices, parties who plan to make a formal written document to express their agreement necessarily discuss and negotiate the proposed terms of the agreement before concluding it. They often agree on all the conditions to be included in the proposed written document before it is prepared. Their consent may be expressed orally or by a memorandum, by exchange of letters or by other informal writings. The parties can “conclude a contract”, i.e.

    they can undertake to execute at a later date a formal written agreement with specific conditions. If they agree on all the essential provisions to be included in a formal document, with the intention of making their agreement binding, they have fulfilled all the conditions required for the conclusion of a contract. The fact that a formal written document of equivalent effect is then drafted and signed does not alter the binding validity of the original contract. In January 2016, the Court of Appeal again asked to what extent an agreement in Hughes v Pendragon Sabre Limited (t/a Porsche Centre Bolton) 2016 EWCA Civ 18 was applicable. When English courts are faced with this problem, they usually require that certain essential elements of a contract be agreed before applying it. In fulfilling their duty to interpret contracts fairly and taking into account the intentions of the parties, courts will not intervene to “enter into a contract” or “go beyond the terms used”.1 Therefore, agreements relating to the agreement have traditionally been annulled for reasons of uncertainty, so they are generally considered unenforceable. It is therefore essential that companies carefully consider, during the first phase of the design, what is agreed and the risk that the conditions will be considered unenforceable. . . .