''Pitt v PHH Asset Management Ltd''

994 Year 994 ( CMXCIV) was a common year starting on Monday (link will display the full calendar) of the Julian calendar. Events By place Byzantine Empire * September 15 – Battle of the Orontes: Fatimid forces, under Turkish gener ...

1 WLR 327 is an

English contract law English contract law is the body of law that regulates legally binding agreements in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countrie ...

case, which confirmed the enforceability of lockout agreements.

Facts

Parsonage Lane A clergy house is the residence, or former residence, of one or more priests or ministers of religion. Residences of this type can have a variety of names, such as manse, parsonage, rectory or vicarage. Function A clergy house is typically own ...

Chelsworth Chelsworth is a village and civil parish in Suffolk, England. It lies on the B1115 road, 10 miles in either direction from Sudbury and Stowmarket. It is part of Babergh district. The parish also contains the hamlet of Chelsworth Common. Built ...

Suffolk Suffolk () is a ceremonial county of England in East Anglia. It borders Norfolk to the north, Cambridgeshire to the west and Essex to the south; the North Sea lies to the east. The county town is Ipswich; other important towns include L ...

, 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 Sir Thomas Henry Bingham, Baron Bingham of Cornhill, (13 October 193311 September 2010), was an eminent British people, British judge who was successively Master of the Rolls, Lord Chief Justice of England and Wales, Lord Chief Justice and Sen ...

gave the following judgment.

Notes

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References

Ewan McKendrick Ewan Gordon McKendrick (born 1960) is Professor of English Private Law at the University of Oxford. He is known for his academic work on the law of contract, as well as publications in the law of unjust enrichment and commercial law. Life McKendri ...

, ''Contract Law'' (7th edn Palgrave 2007) 91, says that being freed from the nuisance as being "good consideration" does not sit easily with ''

White v Bluett ''White v Bluett'' (1853) 23 LJ Ex 36 is an English contract law case, concerning the scope of consideration in English law. Facts Mr Bluett had lent his son some money. Mr Bluett died. The executor of Mr Bluett's estate was Mr White. He sued t ...

''. English agreement case law Court of Appeal (England and Wales) cases 1993 in United Kingdom case law

Facts

Judgment

See also

Notes

References