The recent case of Pretoria Energy Company
(Chittering) Ltd v Blankney Estates Ltd looks at
whether heads of terms are sufficient to create a binding agreement
between parties in the absence of a signed lease agreement.
Background
This case relates to the appeal in the Court of Appeal of the
High Court's earlier decision.
By way of background, Blankney Estates and Pretoria Energy
entered into negotiations regarding the grant of a new lease to
Pretoria.
Heads of terms were drawn up, and whilst they were marked
"Subject to Full Planning Approval and appropriate easements
and consents", they were not stated to be subject to
contract.
The Heads of Terms contained an agreed period of exclusivity,
and when this expired, Blankney Estates lost confidence in Pretoria
and entered into negotiations with a third party.
