‘Subject to contract’—means exactly that! (Baltimore Wharf v Ballymore Properties)
Construction analysis: The Technology and Construction Court (TCC) dismissed applications for summary judgment, holding that once negotiations include a ‘subject to contract’ reservation, that conditionality remains unless all parties expressly agree it has been removed or such agreement is necessarily implied. The court made clear that acceptance of terms in a ‘subject to contract’ agreement cannot in itself lead to a binding agreement. The underlying dispute concerned the collapse of a nursery roof at Baltimore Wharf, with damages estimated at over £2m. Settlement negotiations marked ‘subject to contract’ culminated in the claimant's solicitor confirming on 24 September 2024 that ‘the Settlement Agreement with WSP's amends is agreed’. However, the agreed settlement agreement remained marked ‘Subject to contract and without prejudice save as to costs’, with nothing in the email exchange demonstrating abandonment of this clear conditionality. The court found no evidence of necessary implication that the subject to contract reservation had been removed, noting that subsequent conduct of the parties, including agreements to stay proceedings was inconsistent with parties believing a binding settlement existed.