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CONTRACT: Making your mind up

01 December 2017  

Tom Whittaker weighs up the judicial scrutiny of contractual discretion

Contracts often confer obligations to make decisions, exercise discretion or form opinions on one or more parties, but such obligations can come with strings attached, both express (in the contract) and implied (by case law). Historically, implied limits on the exercise of contractual discretion have been clear and relatively easy to understand, but recent decisions have imported an additional and imprecise requirement of ‘reasonableness’ from judicial review decisions. It is therefore now increasingly common for parties to find their contractual decisions under scrutiny from the courts.

Additional Info

  • Case(s) Referenced:

    Abu Dhabi National Tanker Co v Product Star Shipping Ltd (The ‘Product Star’) (No. 2) [1993] 1 Lloyd’s LR 397

    Associated Provincial Pictures Houses Ltd v Wednesbury Corporation [1948] 1 KB 223

    Braganza v BP Shipping Ltd [2015] UKSC 17

    Cantor Fitzgerald International v Horkulak [2004] EWCA Civ 1287

    Hayes v Willoughby [2013] UKSC 17

    JML Direct Ltd v Freesat UK Ltd [2010] EWCA Civ 34

    Mid Essex Hospital Services NHS Trust v Compass Group UK and Ireland Ltd [2013] EWCA Civ 200

    Monde Petroleum SA v Westernzagros Ltd [2016] EWHC 1472 (Comm)

    Paragon Finance plc v Pender & anor [2005] EWCA Civ 760

    Shurbanova v Forex Capital Markets Ltd [2017] EWHC 2133 (QB)

    Socimer International Bank Ltd v Standard Bank London Ltd [2008] EWCA Civ 116

    Watson & ors v Watchfinder.co.uk Ltd [2017] EWHC 1275