Often one party to a contract is allowed to act only with the consent of the other party, “not to be unreasonably withheld.”
A common context in this regard is the right to assign an agreement. The language used is typically, “[Party A] may not assign this Agreement without the consent of [Party B], such consent not to be unreasonably withheld.”
So what happens if Party B unreasonably withholds consent? Does the refusal then automagically become consent, such that Party A is free to assign away?
In other words, is the “such consent” proviso a condition to the right to assign? Or is the refusal of consent a breach of contract on the part of Party B but otherwise provides no meaningful remedy for Party A? After all, what would the damages be for breach of the reasonableness obligation?
The lawyers of Redline have wrestled with this conundrum—and solutions abound!
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