Agreement Not To Be Unreasonably Withheld

The concept of “consent should not be inappropriately refused” should always be considered on a case-by-case basis, with the burden of proof of inappropriate refusal of consent falling on the tenant. The Tribunal concluded that the phrase “which should not be inappropriately refused” should not be interpreted as a qualification of the tenant`s agreement. On the contrary, it is essentially an obligation for the lessor “not to arbitrarily or unreasonably refuse consent”, which is subject to damages if this obligation is not complied with.3 The plaintiff borrowers initially brought an action against the defendant bank for allegations of mis-sale of various credits. These proceedings were settled and a “Tomlin`s Order” was made (in fact, an order that was used to jeopardize the dispute in the High Court). Following this order, the defendant bank would maintain a remaining loan facility of approximately €5.9 million for a period of five years, secured against real estate in France worth approximately €4 million, but inserted in the loan agreement with the following provision: “If, with the prior agreement of the Bank (such authorization cannot be inappropriately refused or delayed), if the property is sold, you have to immediately reimburse the bank for the net proceeds of the sale.” In this case, it is the duration of an agreed transaction decision after the borrower has brought an action against the lender over different credit agreements. Following the order, the borrower`s outstanding debt amounted to €5.9 million compared to a French property worth approximately €4 million. It is not uncommon to see exceptions allowing borrowers to take otherwise restricted measures under credit agreements with the agreement of the lender, to “not be unduly withheld or delayed” (or variations in these formulations). As this case shows, these qualified approval fees won`t always offer all the aces to lenders. Indeed, this case is a reminder that banks that refuse to give consent can expect their decisions to be challenged, unless they have done their homework properly and find a very good reason why approval is not granted. When establishing an agreement on your business relationship, the meaning of words is important; It is important to ensure that the actual meanings and implications of frequently used words are understood.

In the event of disagreement or dispute over a party`s obligations under a contract, difficulties may arise when words or phrases actually have meanings that one or both parties have not understood. The example below serves to demonstrate the risk of not understanding (i) the actual meaning and implications of the words used in practice; and (ii) take full account of the specific obligations you request from the other party to a contract and vice versa. In 2007, 3M agreed to purchase the entire stake in Acolyte Biomedica Ltd as part of a SPA. The applicants were sellers of shareholders, but not all, who represented 60.4% of the shares sold in 3M (the sellers). The consideration for the sale of the shares was £10.4 million. in cash and an additional payment (Earn-out) based on net turnover in 2009 (up to a maximum of £41 million). Acolyte`s only commercial product was BacLite MRSA, a diagnostic test for MRSA, a harmful bacterium that is common in hospitals. As part of the SPA, 3M undertook to obtain: “i) without the written consent of the sellers, which cannot be inappropriately refused, (i) [Acolyte] cannot . cease its business or the business of developing and marketing the Earn Out [Acolyte] products fory forsing … Acolyte`s business unfortunately did not come to fruition. .

. .