When do lease negotiations and documents become binding?

In Brief - The recent NSW Supreme Court decision of Realm Resources Ltd v Aurora Place Investments Pty Ltd [2019] NSWSC 379 highlights the importance of clearly stating when documents are to be binding

A dispute arose as to whether the sublessee was bound after signing and returning the sublease to the sublessor

The dispute that arose related to a sublessee who attempted to withdraw from a sublease following signing and returning the sublease to the sublessor. The court considered the sublessee's contention that the sublease had been delivered in escrow, where the sublease was not intended to become binding until execution and delivery by the sublessor. Despite this, the Court held that the sublessee was bound immediately after signing and submitting the sublease to the sublessor. Importantly, this was the case even before the sublessor had signed.