Contract law in the 20th century Case Study Example | Topics and Well Written Essays - 1500 words

Contract law in the 20th century - Case Study Example The case is connected with the situation when the parties were negotiating on the subject of Walford's buying the photography business belonging to Miles. They have come to a certain agreement as for the purchase, and Walford was going to provide Miles with the bank comfort letter with the purchase price; Miles in return was obliged and has agreed to terminate any other negotiations as for selling his business with any other third parties. Against previous agreement, Miles sold his business to the third party and thus Walford had to bring the case to the court for breaching the previous agreement. Traditionally, such kind of agreement would be called a 'lock-out' agreement, when one of the parties agrees not to perform negotiations for a certain period of time with any other third party; however, it was also concluded that the case lacked two essential components to be a 'lock-out' agreement: the period of time during which negotiations had to be stopped had not been defined, as well as any provision as for determining negotiations by Miles was absent. Despite the fact that Walford was insisting on the applicability of the good fait principle in the case, the Judge of the case, Lord Ackner, was sure that the principle of good faith was not applicable to negotiations, as it was contradicting the essence of negotiations as a notion. It was supposed that the principle of good faith is inconsistent with the notion of negotiations in the contract law, because it contradicts with the opposite opinions and positions the parties take in negotiations. However, the case should be viewed from another viewpoint: whether Lord Ackner was thorough in his research to state that the principles of good faith are