Alubaf argued that there is a practice in the aviation financing sector, namely that parties are not required to participate until “the final documentation is executed at the conclusion of the transaction”5. However, the judge found that the wording of the letter of commitment was unclear and that if Alubaf had intended the letter of commitment not to be binding or to bind only certain provisions, it should have been expressly expressed in the document. In addition, the Tribunal found that there was no objective evidence of the parties` conduct indicating that the letter was not binding and/or that it was considered a statement of intent. Indeed, Novus took steps to continue the transaction with MAS after the signing of Alubaf`s letter of commitment, alubaf being “locked up” from Novus` point of view as an equity investor. The evidence provided by the experts in this case showed that while an investor may choose not to commit unconditionally until the documentation has been finalized, the terms of the letter of commitment have not. However, the mutual satisfaction of interests is not always sufficient to gain commitment. In these cases, there are other effective strategies. Like a donkey that does not move, we sometimes offer a carrot and sometimes we use a whip to move the donkey. Similarly, the following strategies, either through positive reinforcements called carrots or through the imposition of sanctions called sticks, may be necessary to ensure engagement. Don`t get me wrong. I think one of the essential roles of a leader is to get the buy-in, or, as we say in EOS®, to share the vision of all (SBA). The problem lies in words like “consensus” or “agreement.” Consensus management does not work.
Great leaders set a vision and then get the team to commit to the vision. Recognize the factors and tactics that can cause an agreement prematurely and unfortunately. Some are psychological levers that we impose on ourselves, and others are tricks that can have considerable consequences. As a leader looking for buy-ins and sign-ups, have you ever tried to ask for “consent” rather than “commitment”? What if you experimented with making your intentional intentions more realistic and authentic? Contractual obligations can be established for contractual, executive, standing, service or catalog agreements. “So why not try to come to an agreement?” says John. At the beginning of a transaction, the parties often use a letter of commitment, memorandum of understanding or memorandum of understanding to define the main conditions under which the parties wish to establish their business relationship. The terms of these documents are often non-binding and usually expressly state that this is the case and set out certain exceptions, such as confidentiality rules and any terms of payment of fees or deposits due prior to the signing of the final transaction document. Of course, some elements of the commitment are themselves more binding in a letter of commitment and, in the case of Novus Aviation Ltd v Alubaf Arab International Bank BSC (c)1, the position was examined in the absence of a statement that one of its conditions was not binding.
Had Alubaf not withdrawn from the transaction, Novus (through a special purpose vehicle) would most likely have purchased the aircraft and Novus would have received administrative fees from Alubaf through a management contract (already signed by Alubaf at the time of its withdrawal, but awaiting Novus` signature). . . .