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Since there could be no contract during the period of two days triggered by agreement on “all terms”, there could have been no binding contract at any prior stage. Therefore, Owners had been free to withdraw from the negotiations for the fixture at the stage when the parties had not agreed on “all terms”.
Case note contributed by Jim Leighton, LLM (Maritime Law), LLB (Hons), BSc (Hons), Solicitor Advocate of England & Wales, IMI Qualified Mediator, LMAA Supporting Member and International Contributor to DMC’s Case Notes
The additional twist in this instance is that, even if a “recap” has been agreed in principle, the “lifting” of an approval “subject”, which may cause the “recap” to become binding, may itself be subject to the fulfilment of another pre-condition.
As such, in this case there was a need to agree to “all terms”, following the review of a document incorporated by the “recap”, as another pre-condition, with the result that TMLPL’s TMLPL purporting to “lift” the CMA “subject” was of no effect.
Given the above, if a party is desirous of achieving a binding contract at the earliest possible time, simply obtaining the agreement of the other party to forgo its own approval “subjects” – Owners’ BOD subject in this case (which the prospective charterers had, incorrectly, considered to be enough to achieve their goal) – may turn out to be insufficient.
