Facts[]
Courtney offered to help Tolaini find a contractor to help him build the hotel that he desired. They entered into a contract stating that if the Tolaini quality supervisor ad the price that Courtney was able to find, then Courtney would receive 5% of the purchase price as payment. Courtney found a potential builder, however the Tolaini quality supervisor would not accept the terms. Tolaini found another contractor without the help of Courtney and used him to build his project. Courtney sued for breach of contract and was successful at trial, which Tolaini appealed.
Issue[]
- Was the contract to enter into a contract valid?
Decision[]
Appeal allowed.
Reasons[]
Denning says that it is clear that no binding contract was present here. He discusses the terms of the contract that clearly state that the quality surveyor must negotiate the price with the Courtney's contractor before a contract is reached. Without an agreed price, it is unconceivable that a construction contract can be established. With the absence of such an important condition there can be no binding contract. He also states that in general an agreement to enter into an agreement is not a binding contract, as it is too vague to enforce – damages would be impossible to calculate. Diplock further states that Wright's statement in Hillas & Co., Ltd. v Arcos, Ltd. (1932) was bad law.
Ratio[]
A contract to negotiate is unenforceable; the nature of negotiation is such that the parties might never reach an agreement.