Hungry Jack's v Burger King (No 2) [2000] NSWSC 241

Hungry Jack's v Burger King (No 2) [2000] NSWSC 241

The requirement in clause IX(B) that HJPL have the right to remain in possession of premises for the new term was not a condition precedent to BKC's obligation to make an offer. Requiring HJPL to bind itself to acquire or lease suitable premises for 15 years before receiving and having an opportunity to accept the offer was commercially unthinkable. Sub-clauses A and B were conditions to be addressed before entry into the new Franchise Agreement after the offer was made and accepted.

Jurisdiction
Australia
Judgment Date
30 March 2000
Procedural Posture
Notice of Motion in Equity Division Commercial List Proceeding Concerning Franchise Agreement Renewal Orders / Post Judgment Application Following Orders Made After Reasons Published on 5 November 1999
Outcome
HJPL succeeded on the principal issue; the Court held that clause IX(B) did not constitute a condition precedent to BKC making an offer, and invited the parties to bring in Short Minutes of Order.
Legal Topics
['construction of Franchise Renewal Clause' 'conditions Precedent and Conditions Subsequent' 'franchise Agreement Offer' 'right to Remain in Possession of Premises' 'short Minutes of Order']
['contract Law' 'franchising' 'civil Procedure'] ['construction of Franchise Renewal Clause' 'conditions Precedent and Conditions Subsequent' 'franchise Agreement Offer' 'right to Remain in Possession of Premises' 'short Minutes of Order']

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Procedural Posture

Notice of Motion in Equity Division Commercial List Proceeding Concerning Franchise Agreement Renewal Orders / Post Judgment Application Following Orders Made After Reasons Published on 5 November 1999

Legal Issues

  1. 1 ["Whether the requirement that HJPL have the right to remain in possession of the premises under clause IX(B) of the Standard Franchise Agreement and Order 4 was a condition precedent to BKC's obligation to make an offer of a further franchise agreement." "Whether BKC was required to make an offer for a franchise agreement for premises at Murray Street, Perth despite HJPL's lease being conditional on approvals."]

Ratio Decidendi

The requirement in clause IX(B) that HJPL have the right to remain in possession of premises for the new term was not a condition precedent to BKC's obligation to make an offer. Requiring HJPL to bind itself to acquire or lease suitable premises for 15 years before receiving and having an opportunity to accept the offer was commercially unthinkable. Sub-clauses A and B were conditions to be addressed before entry into the new Franchise Agreement after the offer was made and accepted.

Court Disposition

HJPL succeeded on the principal issue; the Court held that clause IX(B) did not constitute a condition precedent to BKC making an offer, and invited the parties to bring in Short Minutes of Order.

Orders

  • ['Parties to bring in Short Minutes of Order.']