Natalie Johnston considers whether a party can rely upon pre-contractual statements in lease negotiations to create a contractual obligation
Parties who are negotiating a contract want the written terms to represent the full agreement between the parties and they do not want their “subject to contract” negotiations to burden them with a contractual obligation. The issues of collateral contract, estoppel and contractual waiver undermine a party’s ability to say that all the terms of an agreement are set out within the body of the written agreement.
However, in property transactions certainty is essential so that parties are able to ascertain their legal rights and obligations from the documents and the relevant legal registers. Business Environment Bow Lane Ltd v Deanwater Estates Ltd [2007] EWCA Civ 622, [2007] All ER (D) 317 (Jun) reinforces the need for certainty but the possibility of pre-contractual negotiations creating a contractual obligation still exists, even in negotiations for a lease. This is a cautionary tale for those negotiating contracts, including contracts relating to interests in land.
LEASE NEGOTIATIONS
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