When does a draft deal become a binding agreement?
As any property professional will know, negotiations can be tense and it is common for various draft agreements to fly between parties without any final deal in fact having been reached.
This is what happened in the case of Publity AG. V Chesterhill Properties Limited (2016), which involved the proposed lease of a luxury central London home at a rent of £6,500 a week.
Company A wished to lease the house from its owner, company B. A total of five tenancy agreements, in various forms, were drafted during negotiations and some of them were signed on behalf of one party or the other.
Company A had been given the keys to the property, and was in the process of moving in furniture, when sticking points emerged as to the terms of the tenancy, in particular its start date.
Company A launched proceedings on the basis that a tenancy agreement had been finalised. It sought declarations to that effect and damages for unlawful eviction. Company B submitted that no binding agreement had been reached. The High Court accepted that a tenancy agreement had been signed and posted on behalf of company A. Arguments that the document had been concocted were rejected.
However, in ruling in favour of company B on the principal issue, the Court found that no final agreement had ever been achieved in respect of the tenancy's start date. The relevant document had also not been dated in accordance with its terms. Company B had thus made no offer which was capable of being accepted by company A and no binding tenancy agreement had been created.
Company A, however, was entitled to the return of monies that it had paid in respect of improvements to the property prior to the date on which it had planned to move in. A damages claim pursued by company B, on the basis that the moving of furniture into the property amounted to a trespass, was dismissed.
[edit] Find out more
[edit] Related articles on Designing Buildings Wiki
Featured articles and news
ECA 2024 Apprentice of the Year Award
Entries open for submission until May 31.
UK gov apprenticeship funding from April 2024
Brief summary the policy paper updated in March.
For the World Autism Awareness Month of April.
70+ experts appointed to public sector fire safety framework
The Fire Safety (FS2) Framework from LHC Procurement.
Project and programme management codes of practice
CIOB publications for built environment professionals.
The ECA Industry Awards 2024 now open !
Recognising the best in the electrotechnical industry.
Sustainable development concepts decade by decade.
The regenerative structural engineer
A call for design that will repair the natural world.
Buildings that mimic the restorative aspects found in nature.
CIAT publishes Principal Designer Competency Framework
For those considering applying for registration as a PD.
BSRIA Building Reg's guidance: The second staircase
An overview focusing on aspects which most affect the building services industry.
Design codes and pattern books
Harmonious proportions and golden sections.
Introducing or next Guest Editor Arun Baybars
Practising architect and design panel review member.
Quick summary by size, shape, test, material, use or bonding..