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Key information

House of Lords (UK)

Certainty - Lockout agreements

AustraliaWalford v Miles

[1992] 2 AC 128


Mr and Mrs Miles agreed to negotiate with Walford for the sale of a photographic processing business.  They also agreed to terminate negotiations for the sale of the business to any other purchaser (which they did), provided Walford confirmed they were financially able to proceed with a purchase (which they did).  However, the Miles’ subsequently decided not to proceed with the negotiations for the sale and eventually sold to a third party. Walford sued for breach of contract. Walford succeeded at trial.  Mr and Mrs Miles succeeded in an appeal.


On further appeal - Lord Ackner: ‘There is clearly no reason in the English contract law why A, for good consideration, should not achieve an enforceable agreement whereby B, agrees for a specified period of time, not to negotiate with anyone except A in relation to the sale of his property.’  Lord Ackner noted the commercial benefits of such an arrangement and stressed that such an agreement is 'a negative agreement' which does not lock B into negotiations with A.