Many contracts confer a discretion or power on one or more contracting parties, the exercise of which may significantly affect the rights and obligations of others. Where such discretions or powers exist, questions can arise as to constraints on their exercise; parties to contractual disputes frequently raise these issues in litigation.
The Courts have not yet clearly articulated the principles governing the exercise of contractual discretions and powers. This session will examine leading New Zealand and UK decisions and attempt to identify a set of organising principles. It will consider when arguments based on improper exercise may properly be advanced in litigation, as well as the limits of such arguments. The session will also address practical drafting considerations and strategies to reduce uncertainty and mitigate the risk of disputes arising from the exercise of discretions or powers.
