Case: Coal Cliff Collieries Pty Ltd v Sijehama Pty Ltd (1991) 24 NSWLR 1 
Outcome: applied
However, since the early 1990's courts have, in certain circumstances, held that an explicit promise to negotiate in good faith is sufficiently certain to be contractually binding: eg Coal Cliff Collieries Pty Ltd v Sijehama Pty Ltd (1991) 24 NSWLR 1; Australis Media Holdings Pty Ltd v Telstra Corporation Ltd (1998) 43 NSWLR 104; Aiton Australia at [80]; and see Carter JW, Peden E, Tolhurst GJ, Contract Law in Australia (5 th ed, 2007) at 94-95. 120 In Coal Cliff at 26, Kirby P said that: "...so long as the promise is clear and part of an undoubted agreement between the parties, the court will not adopt a general principle that relief for the breach of such promise must be withheld." 121 The first question is the proper construction of cl 3.3 of the HofA. Clause 3.3 of the HofA provides that: "[e]ach party will conduct all such negotiations in good faith to ensure that the terms set out in these [HofA] are given full effect." 122 It is a composite clause. It appears to involve two concepts - " negotiations in good faith " - but directed at a particular end - "to ensure that the terms set out in these [HofA] are given full effect. " The phrase " negotiations in good faith " is not a defined term. That does not necessarily make the requirement uncertain. In Coal Cliff at 27, Kirby P acknowledged that: "[i]n a small number of cases, by reference to a readily ascertainable external standard, the court may be able to add flesh to a provision which is otherwise unacceptably vague or uncertain or apparently illusory: see eg, Powell v Jones [1968] SASR 394 at 399; Sweet and Maxwell Ltd v Universal News Services Ltd [1964] 2 QB 699; cf Meehan v Jones [1982] HCA 52 ; (1982) 149 CLR 571 at 589; Jillcy Film Enterprises [ Inc v Home Box Office Inc 593 F Supp 515 at 521 (1984); [and]] Ridgeway Coal Co Inc v FMC Corporation [616 F Supp 404 (1985) at 408] ." 126 An examination of just two cases illustrates the difficulties in identifying any standard or principle against which the certainty of such a clause is to be considered. In Coal Cliff , the Court found that an obligation to proceed " in good faith to consult together upon the formulation of a more comprehensive and detailed joint venture agreement " was uncertain: see Kirby P at 28 with whom Waddell A-JA agreed. Kirby P, while clearly recognising that some contracts to negotiate in good faith will be enforceable at law (at 27), considered that the contract in question was outside the " small number of cases" : "This was not a case where an external arbitrator was nominated to resolve outstanding differences. There were many such differences at the time of the heads of agreement and a number remain even three years later when negotiations were finally broken off. A court would be extremely ill-equipped to fill the remaining blank spaces and to resolve questions which three years of painful negotiation between the solicitors for the parties had failed to remove. A court could not, in this case, appeal to objective standards or to its own experience as it might in filling a blank space in a lease of domestic premises or a contract less complex and more familiar than one for a major mining development. At stake are commercial decisions involving adjustments which would contemplate binding the parties for years and deciding issues that lie well beyond the expertise of a court. How mining executives, attending to the interests of their corporation and its shareholders might act in negotiating such a complex transaction is quite unknowable." (Emphasis added) Clearly, his Honour was concerned about the incompleteness of the contract and the extent to which the court, if it was to give effect to the clause, would be required to undertake the inappropriate exercise of determining terms yet to be negotiated in order to make the contract workable. 130 I consider that cl 3.3 of the HofA is uncertain. Clause 3.3 of the HofA suffers from the same problems referred to by Kirby J in Coal Cliff . As I have said, what does the phrase " [e]ach party will conduct all such negotiations in good faith to ensure that the terms set out in these [HofA] are given full effect " mean? How and against what standard is the Court to fill in the gaps? I consider the issue of the content of any such duty in further detail in section (iii) below. For present purposes, it is sufficient to note that I do not consider that it was open to BreakFree to seek to terminate the HofA on the grounds that Latitude had breached cl 3.3 of the HofA. The term was uncertain.