AMA Group Limited v ASSK Investments Pty Limited

[2021] NSWCA 45

NSW Court of Appeal

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Interrogate

Catchwords

1. Contract
2. › Construction
3. › Binding Heads of Agreement
4. › Whether agreement effected sale or was agreement to enter into further agreements
5. › Whether clause constituted condition precedent to performance
6. › Meaning of 'subject to the terms and conditions'
1. Contract
2. › Construction
3. › Conditions precedent
4. › Purchaser's Board approval as condition precedent
5. › Whether approval could be withheld capriciously
6. › Implied requirement of honesty or reasonableness
1. Contract
2. › Construction
3. › Commercial common sense
4. › Whether construction according with business-like interpretation
5. › Whether construction rendered terms of agreement unworkable or illusory
1. Equity
2. › Specific performance
3. › Contract for sale of business
4. › Whether condition precedent unsatisfied precluded specific performance

Quick Take

A clause requiring Board approval, when included in a list of defined 'Conditions Precedent' in a heads of agreement, will ordinarily be construed as a true condition precedent to performance, not merely a formality satisfied by the initial signing of the agreement.