Contractual discretion: The age of reason?

David Hall, Tom Whittaker and Harry Jewson condense the lessons to be learned five years post-Braganza ‘In those cases where a Braganza term has been implied, there is a clear justification that the term is necessary in order to prevent, or protect against, an abuse of power by the decision-maker.’ In Braganza v BP Shipping …
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Contracting: Discretion is the better part of valour

Jason Rix examines contractual discretion and absolute contractual rights ‘Where a contract is found to include a contractual discretion, the authorities show it will be subject to an implied term that the person exercising the discretion does so honestly and in good faith, with regard to the contract.’ Freedom of contract is a common term …
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Contract: Making your mind up

Tom Whittaker weighs up the judicial scrutiny of contractual discretion ‘Historically, the court has required only that the relevant decision be made without arbitrariness, capriciousness and irrationality. More recent cases, however, suggest that the court may also require that the decision be reasonable.’Contracts often confer obligations to make decisions, exercise discretion or form opinions on …
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Contract: Gotta have faith

In the second of two articles, Chris Parker, Gregg Rowan and Nick Pantlin look at the judicial implication of a duty of good faith ‘The precise formulation of the duty differs between cases, but the essence seems to be a requirement to exercise the discretion honestly and in good faith, and not to act in …
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Commission Payments: Making sure everyone gets their fair share

A Court of Appeal ruling highlights the difficulties employers face in asserting absolute discretion over commission or bonus awards. Stephen Ravenscroft and Jo Bennett report ‘Mr Hills argued that Niksun had not discharged the burden of proof as it had not offered any evidence from the main decision maker to establish that it had acted …
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Contract: Beyond reason

Jonathan Elvey and Despina Plomaritu consider the recent decision in Braganza ‘In private contracts, as in public matters, both limbs of Wednesbury should be looked at in assessing the reasonableness of a decision. And on that basis (said the three majority judges), BP had acted unreasonably.’ Contracts often give you free rein to take a …
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