The Enforceability of Agreements to Negotiate in Major Construction Projects

Trevor Thomas

April 2009

A paper based on the Commended entry in the Hudson Prize essay competition 2008.

Trevor Thomas looks at interim arrangements - to meet, discuss and work towards agreeing a final construction contract - 'agreements to negotiate', and whether they are legally enforceable. The paper explores some of the main arguments for and against the enforceability of agreements to negotiate; principally whether they are akin to agreements to agree and consequently unenforceable due to a lack of contractual certainty and whether the consideration provided under an agreement to negotiate is illusory. Trevor Thomas contrasts the view of the English and Australian courts. He concludes that, where the parties to a major construction project wish to establish an agreement to negotiate, careful thought must be given to whether the agreement is intended to be enforceable.

Introduction - Uncertainty in agreements to negotiate - Consideration in an agreement to negotiate is illusory - Conclusions.

The author: Trevor Thomas BEng, MEng, LLB, LLM is a Senior Associate of Clayton Utz, Melbourne, Australia.

Text 19 pages.

PDF file size: 174k