- Project plans
- Project activities
- Legislation and standards
- Industry context
Last edited 02 Mar 2017
When does a draft deal become a binding agreement?
Company A wished to lease the house from its owner, company B. A total of five tenancy agreements, in various forms, were drafted during negotiations and some of them were signed on behalf of one party or the other.
Company A launched proceedings on the basis that a tenancy agreement had been finalised. It sought declarations to that effect and damages for unlawful eviction. Company B submitted that no binding agreement had been reached. The High Court accepted that a tenancy agreement had been signed and posted on behalf of company A. Arguments that the document had been concocted were rejected.
However, in ruling in favour of company B on the principal issue, the Court found that no final agreement had ever been achieved in respect of the tenancy's start date. The relevant document had also not been dated in accordance with its terms. Company B had thus made no offer which was capable of being accepted by company A and no binding tenancy agreement had been created.
Company A, however, was entitled to the return of monies that it had paid in respect of improvements to the property prior to the date on which it had planned to move in. A damages claim pursued by company B, on the basis that the moving of furniture into the property amounted to a trespass, was dismissed.
 Find out more
 Related articles on Designing Buildings Wiki
Featured articles and news
Opening up the space below the former Floral Hall.
Why was the Fountaine Hospital Almshouse built in such a sophisticated style?
How do we measure air tightness in buildings?
The Housing Infrastructure Fund
Encouraging access to local amenities and sustainable transport.
Publish your thought leadership articles on Designing Buildings Wiki – for free.
Competence Steering Group publishes interim proposals to deliver safer buildings.
Indoor environments should provide a multi-sensory experience.
We have a great range of introductory articles written by ECA.
7 of the most common myths, busted.