How to Ensure That an Agreement to Negotiate in Good Faith is Enforceable
While an agreement to negotiate in good faith can be enforceable, like any other agreement, it must be expressed as a contractual commitment and not just noted as an intention or expectation, writes Shep Davidson in The In-House Advisor published by Burns & Levinson.
“Failing to understand this distinction and/or draft a contract carefully in this regard, could result in your client having no recourse for the other party’s failure to live up to its promise,” he writes.
He discusses the case of Schwanbeck v. Federal-Mogul Corp., pointing out that the case shows “that if you really want an agreement to negotiate in good faith to be enforceable, you have to be precise in how you describe what the parties will and will not do going forward.”
