Contract: Lambert v HTV Cymru (Wales) Limited and another (3 March 1998) Court of Appeal

Although this case does not relate to the environment it is of interest because it concerns the interpretation of wording common in contracts of most types. Rae Lambert issued a summons alleging breach of contract in relation to, inter alia, the breach of clause 9 of an assignment which required HTV Cymru (Wales) Limited to use "all reasonable endeavours" to obtain from any further assignee a right to first negotiation of publishing rights for Rae Lambert. At the hearing HTV Cymru (Wales) Limited contended that the clause was invalid because it was impossible to ascertain what it's obligations were under clause 9 and therefore it could not have contractual effect. The Judge agreed, and struck out the relevant part of the statement of claim on the grounds that English law would not recognise or enforce "a right to negotiate" (although a "lock out" agreement restricted in time may be enforceable). Rae Lambert appealed, submitting that the right to first negotiation contained a "lock-out element" and that, in any event, it was capable of conferring a benefit on the plaintiff even if it were unenforceable. The Court of Appeal held that there was a difference between the contract itself and the contractual obligation to use "all reasonable endeavours". The latter made it quite clear what a contracting party was obliged to do. Whether a right to first negotiation turns out to be enforceable ultimately depends on the negotiation itself but there was sufficient certainty in the clause for it not to have been struck out. The appeal was allowed and the relevant passage in Rae Lambert's statement of claim was restored. (Times Law Reports, 17 March 1998)