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Agreements To Negotiate Are Legally Binding

Although the tenant ultimately did not sign the proposed final lease, the court ruled that the proposed lease was legally binding during negotiations due to the language used by the tenant in his emails. For example, the tenant said he was “satisfied with the conditions of the proposal” and “approved” the conditions. While the proposal would be replaced by a formal lease, it was found that the proposed lease was applicable in the meantime. Finally, Justice McMurdo of the Supreme Court of Queensland agreed with icon and jakabar`s two main arguments. Morris also supported the principle that the duty to negotiate in good faith is “repugnant to the opposing position of the parties” in negotiations.11 The duty of good faith, if imposed on commercial negotiations, would conflict with the principle of freedom of contract which allows the parties to withdraw or threaten any negotiation at any time without their actions being controlled by the courts. . . .