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Walford and others v Miles and others (1992) HL
The defendants sought to sell their photography processing enterprise and property. The parties concurred on the principal conditions of a sale to the plaintiffs, who committed to furnish a letter of comfort from their bankers confirming the availability of financing for the transaction, in exchange for the defendants' assurance not to engage in negotiations with other parties. The defendants were also accused of having pledged to persist in negotiations with the plaintiffs. The defendants rescinded the transaction to the plaintiffs and transferred the business to an other purchaser.
The court determined that the defendants had not violated any binding contract. An agreement stipulating that the parties shall negotiate (a 'lock in') is unenforceable, as it lacks the requisite certainty, according to Lord Ackner, similar to an agreement to agree. (II) A binding agreement may exist wherein one party refrains from negotiating with others (a 'lock out'). In this instance, the agreement lacked a specification of its duration, a critical feature, rendering it unenforceable due to uncertainty.
The defendants sought to sell their photography processing enterprise and property. The parties concurred on the principal conditions of a sale to the plaintiffs, who committed to furnish a letter of comfort from their bankers confirming the availability of financing for the transaction, in exchange for the defendants' assurance not to engage in negotiations with other parties. The defendants were also accused of having pledged to persist in negotiations with the plaintiffs. The defendants rescinded the transaction to the plaintiffs and transferred the business to an other purchaser.
The court determined that the defendants had not violated any binding contract. An agreement stipulating that the parties shall negotiate (a 'lock in') is unenforceable, as it lacks the requisite certainty, according to Lord Ackner, similar to an agreement to agree. (II) A binding agreement may exist wherein one party refrains from negotiating with others (a 'lock out'). In this instance, the agreement lacked a specification of its duration, a critical feature, rendering it unenforceable due to uncertainty.
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