Legal Question in Business Law in California

Re: Not unreasonably withheld

The terms "not unreasonably" or "reasonably" should give you a sense of confidence in your contracting party. It means that their exercise of authority, or discretion, is subject to some moderation, and not to absolute discretion. Your better of with it, a court, or arbitrator can look to some more objective standard, than the simple desire of your contracting party.

Re: Not unreasonably withheld

You must look at the "standard" within the industry and, should arbitration or litigation be involved, an expert in that industry would be required to actually define the term. It does restrict the employer to act within that standard. Still confused? Please call and we can discuss. 800-685-6950

Re: Not unreasonably withheld

Every contract carries with it an implied promise by the parties to deal reasonably and in good faith with respect to the subject matter of the contract. Therefore, to some degree, admonitions about reasonable and unreasonable withholding of approval, good-faith efforts to bring about a result, etc. are unnecessary.

Nevertheless, the degree of discretion given a party to a contract varies greatly. For example, some leases forbid subletting; this would give the landlord absolute discretion -- well, almost -- to refuse even a reasonable sublease proposal.

Therefore, a well-drafted contract will, at any point where a party is given discretion to approve or disapprove, or to make some change, etc., such as selecting a subcontractor, provide a judge or jury some clue as to how much discretion the party was to be given in that situation.

Frequently the admonition is extended along these lines: ".....which approval shall not unreasonably be refused or delayed....." since delay can have the effect of a refusal.