Obligations Under A Put Option: Conditional Or Concurrent?

The High Court has looked at whether the obligation to pay for shares under a put option was conditional on certain documentation being provided or whether the obligation to pay and provide documents were interdependent.

The trigger event: no IPO

Iconic bought shares in Eagle. The parties envisaged an initial public offering. As protection, if the IPO did not occur, Iconic and the defendant entered into a put option enabling Iconic to require the defendant to buy Iconic's shares. When Eagle did not go public, Iconic gave notice under the option. The defendant did not buy the shares.

Interpretation: conditional or concurrent obligations?

The defendant maintained that the put option required him to pay only if Iconic also complied with its obligations, which included producing a share certificate and other documents needed to effect the purchase, which the defendant said Iconic had not done.