Morris v Swanton Care & Community Ltd

Morris v Swanton Care & Community Ltd

The SPA provisions regarding the further period for Earn-Out Consideration constituted an unenforceable agreement to agree, as there was no objective standard or mechanism for the court to determine the further period in the absence of agreement between the parties. The requirement to 'reasonably agree' did not impose an enforceable obligation, and the court could not substitute its own view for the parties' failure to agree.

Parties
Appellant/claimant: Philip Morris; Respondent/defendant: Swanton Care & Community Limited
Jurisdiction
England and Wales
Judgment Date
11 December 2018
Procedural Posture
Civil Appeal / Appeal From High Court Judgment
Outcome
appeal dismissed
Legal Topics
Agreements to Agree, Contractual Interpretation, Enforceability, Uncertainty in Contracts
Contract Law Agreements to Agree Contractual Interpretation Enforceability Uncertainty in Contracts

Case Brief

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Parties

Philip Morris

Appellant/claimant

Swanton Care & Community Limited

Respondent/defendant

Procedural Posture

Civil Appeal / Appeal From High Court Judgment

Legal Issues

  1. 1 Whether the provisions of the SPA regarding the Earn-Out Consideration for a further period beyond four years constituted an enforceable obligation or an unenforceable agreement to agree
  2. 2 Whether the court could determine a reasonable further period in the absence of agreement between the parties

Ratio Decidendi

The SPA provisions regarding the further period for Earn-Out Consideration constituted an unenforceable agreement to agree, as there was no objective standard or mechanism for the court to determine the further period in the absence of agreement between the parties. The requirement to 'reasonably agree' did not impose an enforceable obligation, and the court could not substitute its own view for the parties' failure to agree.

Court Disposition

appeal dismissed

Orders

  • The appeal is dismissed.