Legal News

An expensive endeavours obligation—£13.4m cautionary case for landowners, developers and contractors (Brooke Homes (Bicester) Ltd v Portfolio Property Partners)

Published on: 16 January 2022
Published by: LexisPSL
  • An expensive endeavours obligation—£13.4m cautionary case for landowners, developers and contractors (Brooke Homes (Bicester) Ltd v Portfolio Property Partners)
  • What are the practical implications of this case?
  • What was the background?
  • What did the court decide?
  • Case details

Article summary

Commercial analysis: Contracts relating to the development of land and property commonly include promotion agreements, joint venture arrangements, overage provisions, agreements for sale and options to purchase, among others. Very often, several such contracts will be involved in any one development project. Development contracts, and the schemes that they underpin, are usually high value. Each development and the issues that arise are particular to their own site and factual circumstances, and they are often complex and fraught with risk. It is also notoriously tricky to cater in the contract for unknown future events; for parties with changing and potentially conflicting interests; and to cover all possible eventualities. In addition, at the outset of any development venture, when landowners, developers, and perhaps other joint venture partners consider doing business together, a multitude of enquiries, discussions and negotiations take place before any deal is finalised. Binding obligations can come into being formally in preliminary contracts and ‘heads of terms’, or informally (and sometimes inadvertently) as a result of oral commitments. For all of these reasons, the negotiation of development arrangements can be a legal minefield, and the consequences of getting the contractual position wrong can be devastating. The case is a cautionary tale of the importance of negotiating, understanding and complying in full with development contract obligations. The High Court considered best and reasonable endeavours, good faith and agreements to agree. Claire Acklam and Charlotte Spowage of Walker Morris analyse the practical implications of the case. or take a trial to read the full analysis.

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