A lock-out or exclusivity agreement prevents one or both of the parties from negotiating with anyone else on certain terms.

This Agreement is made on [date] Parties 1 [insert name of party] [of OR a company incorporated in [England and Wales] under number [insert registered number] whose registered office is at] [insert address] (Party A); and 2 [insert name of party] [of OR a company incorporated in [England and Wales] under number [insert registered number] whose registered office is at] [insert address] (Party B), each of Party A and Party B being a party and together Party A and Party B are the parties. BACKGROUND (A) The parties [propose to enter into OR have entered into] negotiations concerning the Project (as defined below). (B) In acknowledgement of Party B incurring costs and expenses in respect of such negotiations, Party A wishes to grant Party B a period of exclusivity in respect of such negotiations on the terms set out in this Agreement. The parties agree: 1 Definitions and interpretation 1.1 In this Agreement: Associated Act • means [investment in the Product OR the sale, manufacture or distribution of the Product OR the supply of goods or the provision of services in whole or in part that are the same as or similar to

Date [date] Parties 1 [name of Seller] [of OR incorporated in England and Wales (company registration number [number]) whose registered office is at] [address] (Seller) 2 [name of Buyer] [of OR incorporated in England and Wales (company registration number [number]) whose registered office is at] [address] (Buyer) 1 Definitions In this Agreement, the following definitions apply: Buyer's Solicitors • [name] of [address] (reference [details]); Documents • the documents relating to the Property listed in the Schedule; [Exclusivity Fee • £[amount, in figures] [([amount, in words] pounds)];] Heads of Terms • the principal terms attached to this Agreement at the Appendix; Legislation • all legislation having effect in the United Kingdom at any time during the term of this Agreement, including: (a) Acts of Parliament; (b) orders, regulations, consents, licences, notices and bye laws made or granted: (i) under any Act of Parliament; (ii) by a local authority or by a court of competent jurisdiction; (c) any approved codes of practice issued by a statutory body; Lockout Period • the period beginning today and ending at [5.00pm] on [date]; Negotiations • negotiations between the Seller and the Buyer for the sale and purchase of the Property; Property • the property known as [description] registered at HM Land Registry under title number [number]; Property Information • information of any kind relating to the Property (except information which is or becomes publicly

FORTHCOMING CHANGES: The Employment Rights Act 2025 (ERA 2025) amends sections 27A and 27B of the Employment Rights Act 1996 (ERA 1996) to enable the making of regulations under new provisions being inserted into, or amended provisions of, ERA 1996. Certain amendments to ERA 1996, ss 27A and 27B came into force for this purpose on 6 January 2026 (see: Who is protected, below). Others will come into force at a later date (see Practice Note: Employment Rights Act 2025—tracker). This Practice Note will be updated further as soon as more details are available. This Practice Note examines the protections available to workers and employees on zero hours contracts and on lower incomes, relating to: • unenforceable exclusivity clauses • protection from detriment, and • protection from unfair dismissal For information on zero hours workers generally, see Practice Note: Zero hours contracts. Who is protected Employees or workers who work under zero hours contracts are protected under section 27A of the Employment Rights Act 1996 (ERA 1996)

This Practice Note considers exclusivity in the context of contract negotiations. It examines negotiations and agreements to agree, exclusivity or lock-out agreements, the duty to negotiate in good faith, options, rights of first refusal or pre-emption, and break fees. For a template exclusivity agreement, see Precedent: Exclusivity agreement—commercial contracts. Negotiations and agreements to agree Negotiations between parties to agree and conclude a deal can be long-winded, difficult and with many changes to terms. There is often a significant investment of time and cost, including legal and accounting fees, that may prove to be wasted if the parties are unable to agree and finalise the deal. Conditions can change due to external factors, and the results of investigations may change the value of the subject of the deal as well as the negotiating positions of the parties. Where parties are considering a collaboration or joint venture project or a joint tender situation, there may be a period of due diligence where the parties explore how they may work together and agree roles and responsibilities. This is understandable

Strictly private and confidential To: [Insert potential investee company name] [Insert potential investee company address] FAO: [Insert name of relevant contact at the potential investee company] Date: [insert date] Dear [Insert name of relevant contact at the potential investee company], Proposed investment in the share capital[ and loan notes] of [insert investee company name] Limited (the Company) by [insert investor name] (or a member of its group of companies) (the Investor) 1 Introduction We refer to our recent discussions concerning the Investor’s proposed investment (the Proposed Investment) in the share capital[ and loan notes] of the Company (the Investor Equity). Each of the Company and the Investor is a party to this letter and together the parties. 2 Definitions In this letter, unless otherwise provided: Exclusivity Period • means the period from the date of this letter until, and including, [insert date on which the exclusivity period ends]; Relevant Activity • means: (a) the sale, transfer or other disposal of all or any part of the business of the Company[ and/or its subsidiaries] and/or the[ material] assets of the Company[ and/or its subsidiaries], other than in the ordinary course of business; (b) the sale, transfer or other disposal of all

Strictly private and confidential To: [Insert potential seller name] [Insert potential seller address] FAO: [Insert name of relevant contact at the potential seller] Date: [insert date] Dear [Insert name of relevant contact at the potential seller], Proposed acquisition of the business of [insert description of the business to be acquired] (the Business) and assets (the Assets) of [insert seller name] (the Seller) 1 Introduction We refer to our recent discussions concerning the proposed acquisition by [insert buyer name] (or a member of its group of companies) (the Buyer) of the Business and the Assets from the Seller (the Proposed Acquisition). Each of the Seller and the Buyer is a party to this letter (together, the Parties). 2 Definitions In this letter, unless otherwise provided: Exclusivity Period • means the period from the date of this letter until, and including, [insert date on which the exclusivity period ends]; Relevant Activity • means: (a) the sale, transfer or other disposal of all or any part of the Business[ and/or the business of its subsidiaries] and/or the [material] assets of the Seller, other than in the ordinary course of business; (b) the sale, transfer or other disposal of all or any part of the issued

Strictly private and confidential To: [Insert potential seller name] [Insert potential seller address] FAO: [Insert name of relevant contact at the potential seller] Date: [insert date] Dear [Insert name of relevant contact at the potential seller], Proposed acquisition of the entire issued share capital of [insert target company name] Limited (the Company) from [insert seller name] (the Seller) 1 Introduction We refer to our recent discussions concerning the proposed acquisition by [insert buyer name] (or a member of its group of companies) (the Buyer) of [the entire issued share capital OR [insert other description of number of shares being sold]] of the Company (the Sale Shares) from the Seller (the Proposed Acquisition). Each of the Seller and the Buyer is a party to this letter (together the Parties). 2 Definitions In this letter, unless otherwise provided: Exclusivity Period • means the period from the date of this letter until, and including, [insert date on which the exclusivity period ends]; Relevant Activity • means: (a) the sale, transfer or other disposal of all or any part of the business of the Company [and/or its subsidiaries] and/or the [material] assets of the Company [and/or its subsidiaries], other than in the ordinary course of

This Practice Note provides an overview of exclusivity provisions in the context of the acquisition of shares in a company or the acquisition of a business and its assets (the target). Exclusivity provisions may be contained in a separate letter (from the buyer and addressed to the seller) or they may be included in heads of terms (also called an offer letter, letter of intent or memorandum of understanding) or, less frequently, in a confidentiality agreement (if one or both of these documents are entered into). Whatever form they take, exclusivity provisions will be entered into at the outset of the transaction. The purpose of exclusivity provisions is to prevent the seller from negotiating with, or soliciting any competing offers from, any other parties with respect to the sale of the target or a substantial part of its business and assets. They grant the buyer a period of exclusivity within which to negotiate the terms of, and conclude, the transaction. In order to be enforceable, the provisions must be drafted as a 'lock-out' (or 'shut out') arrangement

An exculpatory clause is a contractual provision by which one party seeks to exclude or limit liability for loss, damage or breach, often including negligence, and sometimes fiduciary or statutory duties. It is commonly found in commercial contracts, trust instruments, partnership and LLP agreements, and terms and conditions.Across England & Wales, Scotland, Northern Ireland and Ireland, such clauses are not automatically effective and are strictly construed by the courts. Their enforceability is constrained by statute (notably the Unfair Contract Terms Act 1977 in the UK, the Consumer Rights Act 2015, and the Irish Sale of Goods and Supply of Services Act 1980) and by common law rules on reasonableness, fairness, construction and public policy. Liability for death or personal injury caused by negligence generally cannot be excluded, and clauses purporting to exclude liability for fraud or dishonesty are usually void.“Exculpatory clause” is a descriptive term rather than a defined legislative concept; practitioners also refer to exemption, exclusion or limitation clauses. In Scottish law, similar principles apply through statutory controls and common law on unfair contract terms and fiduciary obligations. The practical focus is careful drafting, transparent risk allocation and evidence that any exclusion or limitation is reasonable and brought to the counterparty’s attention.

Pensions analysis: Hill confirms that reliance on professional advice will not, without more, establish a reasonable excuse for failing to comply with an HMRC information notice. A taxpayer must take reasonable care not only in selecting an adviser but also when receiving and acting on the advice, assessed objectively in light of the taxpayer’s particular circumstances. The Upper Tribunal upheld the First-tier Tribunal’s (Tax Chamber) (FTT) conclusion that the appellants had failed to make appropriate enquiries despite ambiguities and HMRC correspondence. However, it found a material error in the FTT’s assessment of penalty quantum because it had relied on an inapplicable statutory provision. Practitioners should ensure that clients retain advice and supporting material, understand its basis and question unexplained or inconsistent conclusions. Produced in partnership with Mary Ashley of Old Square Tax Chambers.

A trust is executed in the technical sense where the terms of the trust are designated by the instrument or declaration creating it, even though the creator directs a settlement to be executed embodying the designated provisions.