Decided 29 June 1993 | End date June 29, 1993 | |
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Citation(s) [1994] 1 WLR 327; [1993] 4 All ER 961; Times, 30 July 1993; Independent, 6 August 1993; Guardian, 13 August 1993 Judge(s) sitting Sir Thomas Bingham MR, Mann LJ and Peter Gibson LJ Court Court of Appeal of England and Wales Similar White v Bluett, Chappell & Co Ltd v Nestle Co, Williams v Roffey Bros & Nicholl, Hamer v Sidway | ||
Pitt v PHH Asset Management Ltd [1994] 1 WLR 327 is an English contract law case, which confirmed the enforceability of lockout agreements.
Contents
Facts
In Parsonage Lane, Chelsworth, Suffolk, is a residence known as "The Cottage". PHH Asset Management Ltd were undisclosed agents of mortgagees, who were selling The Cottage for £205,000. Mr Pitt and Miss Buckle put in competing bids. Mr Pitt bid £200,000, which PHH accepted ‘subject to contract’. Miss Buckle then increased her bid to £210,000. PHH withdrew its acceptance of Mr Pitt.
Mr Pitt threatened to sue for an injunction, to compel transfer of the cottage to him (it was noted in the Court of Appeal that this probably would have not succeeded, and just caused nuisance). So PHH agreed to sell to him and said they would consider no further offers. This is known as a "lock out agreement". But then, PHH sold to Miss Buckle anyway. Mr Pitt sued. PHH argued in its defence, there was no consideration to not consider further offers (for the lock out agreement), because Mr Pitt had only promised to be ready, willing and able to proceed with exchange of contracts, and he was already obliged to do that.
Judgment
Peter Gibson LJ held there was consideration. First, Mr Pitt had agreed to not apply for an injunction. Even though the claim may not have worked, PHH was freed from the ‘nuisance value’ of defending the claim. Second he had agreed not to make nuisance with Miss Buckle. Third, the promise to proceed within two weeks was consideration. Mann LJ agreed and Sir Thomas Bingham MR gave the following judgment.