Controlling contractual discretion

V.K. Sims; Robert J. Goddard

doi:10.1017/S0008197302301600

Controlling contractual discretion

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Abstract

In 1993 Leggatt L.J. said in Abu Dhabi National Tanker Co. v. Product Star Shipping Ltd. (The Product Star) [1993] 1 Lloyds Rep. 397, 404: Where A and B contract with each other to confer a discretion on A, that does not render B subject to A’s uninhibited whim. In my judgment, the authorities show that not only must the discretion be exercised honestly and in good faith, but, having regard to the provisions of the contract by which it is conferred, it must not be exercised arbitrarily, capriciously or unreasonably.

Original language	English
Pages (from-to)	239-294
Number of pages	56
Journal	Cambridge Law Journal
Volume	61
DOIs	https://doi.org/10.1017/S0008197302301600
Publication status	Published - 2002

Keywords

discretion
exercised honestly
good faith
provisions
contract

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10.1017/S0008197302301600

Cite this

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abstract = "In 1993 Leggatt L.J. said in Abu Dhabi National Tanker Co. v. Product Star Shipping Ltd. (The Product Star) [1993] 1 Lloyds Rep. 397, 404: Where A and B contract with each other to confer a discretion on A, that does not render B subject to A{\textquoteright}s uninhibited whim. In my judgment, the authorities show that not only must the discretion be exercised honestly and in good faith, but, having regard to the provisions of the contract by which it is conferred, it must not be exercised arbitrarily, capriciously or unreasonably.",

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AB - In 1993 Leggatt L.J. said in Abu Dhabi National Tanker Co. v. Product Star Shipping Ltd. (The Product Star) [1993] 1 Lloyds Rep. 397, 404: Where A and B contract with each other to confer a discretion on A, that does not render B subject to A’s uninhibited whim. In my judgment, the authorities show that not only must the discretion be exercised honestly and in good faith, but, having regard to the provisions of the contract by which it is conferred, it must not be exercised arbitrarily, capriciously or unreasonably.

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KW - good faith

KW - provisions

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Controlling contractual discretion

Abstract

Keywords

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