Right to rescind where all conditions have not been discharged (Dooba Developments Ltd v McLagan Investments Ltd)

Right to rescind where all conditions have not been discharged (Dooba Developments Ltd v McLagan Investments Ltd)

The High Court was asked to construe a clause in a property sale and purchase agreement which gave either party a power of rescission ‘if all of the Conditions have not been discharged...by the Longstop Date’.

Original news

Dooba Developments Ltd v. McLagan Investments Ltd [2016] EWHC 2944 (Ch)

In this case, the High Court considered whether a provision that gave either party a power of rescission 'if all of the Conditions ...have not been discharged...by the Longstop Date...' should be construed as meaning that the power to rescind the agreement arose where none of the conditions had been discharged by the longstop date or where any of the conditions had not been discharged by such date.

What was the background to the case?

Dooba Developments Ltd (Dooba) and McLagan Investments Ltd (Asda) entered into a sale and purchase agreement pursuant to which Dooba was to purchase land upon which it was to build a retail superstore for Asda, together with an estate road linking the superstore to the highway (the Agreement). Completion of the Agreement was subject to four conditions (the Conditions):

  • the planning condition
  • the planning agreement condition
  • the highway condition
  • the pre-start condition

The Agreement included various provisions dealing with the discharge of the Conditions, including the following paragraphs:

  • 2.2 'If any of the Conditions have not been discharged by the date they are stipulated in this Agreement to be discharged by...the party entitled to rescind this Agreement...may rescind this Agreement...'
  • 2.3 '...if all of the Conditions have not been discharged...by the Longstop Date, then either Asda or Dooba may r

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