Contract: implied limits on exercise of contractual discretion

In Socimer International Bank Ltd v Standard Bank London Ltd, the Court of Appeal considered a clause requiring one party, in the event of the other's default, to determine the value of certain assets on the date of termination. The court held that, while the discretion had to be exercised in good faith and with rationality, it would not imply a term obliging the party to find, on solely objective criteria, the true market value of the assets, or to take reasonable care to arrive at the true market value: in the context of the agreement, such a further implied term was not necessary, nor was it sufficiently certain.