F. Conclusion

• Author: John D. McCamus
• Profession: Professor of Law. Osgoode Hall Law School, York University
• Pages: 156-159

Page 156

A number of points may be drawn from the foregoing analysis. First, in the context of cases where the parties have not reached agreement on all the essential terms of their agreement, an explicit or implied "agreement to agree" will not serve to fill in the gaps in the agreement. Further, there appears to be little, if any, support in the case law for the notion that such understandings might ground an enforceable duty to bargain in good faith in an attempt to fill the gaps and reach agreement.

In the context of otherwise enforceable agreements, however, where the "agreement to agree" appears, for example, in an option to renew, somewhat more support can be found for the notion that a provision of this kind creates a basis for implying obligations to bargain in good faith. Two caveats, however, should be added to this observation. First, the Mannpar⁷¹decision suggests that a good-faith obligation will be implied only where the option to renew sets forth an objective standard, such as "market rental," toward which the parties are to negotiate. Second, to the extent that the imposition of good-faith obligations has the

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effect of imposing a duty to agree to a reasonable term, it may be asked whether the implication of good-faith obligations is consistent with the apparent requirement of such provisions that the parties genuinely agree to the new term. In any event, it is perhaps not surprising that where there is an existing and otherwise enforceable contractual relationship, the jurisprudence appears to lean more in the direction of enforceability than it does in the context of cases where the parties have failed to reach an original agreement. Where there is an ongoing enforceable agreement, a decision that has the effect of depriving one of the parties of the benefit of an option to renew, for example, may deprive that party of something for which it has in some sense paid and on which it may well have detrimentally relied.

In the tendering cases, Canadian courts have engaged in a fairly detailed scrutiny of the conduct of tendering processes with a view to ensuring fair and equal treatment of bidders. The doctrinal basis for such scrutiny, as we have seen, is the implication of implied terms in a contract entered into by the person who extends an invitation to tender - this constituting an offer - and the submission of the bids that constitutes acceptance of that offer. Although the implied term has often been...