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Lock-in and Lock-out agreements
Last updated: 06-Oct-2014

Walford v Miles [1992] 1 All ER 453, per Lord Ackner at page 458:

As thus pleaded, the agreement purported to be what is known as a 'lock-out' agreement, providing the plaintiffs with an exclusive opportunity to try and come to terms with the defendants, but without expressly providing any duration for such an opportunity.

… the statement of claim alleged that, not only were the defendants 'locked-out' for some unspecified time from dealing with any third party, but were 'locked-in' to dealing with the plaintiffs, also for an unspecified period.

… There is clearly no reason in the English contract law why A, for good consideration, should not achieve an enforceable agreement whereby B agrees for a specified period of time not to negotiate with anyone except A in relation to the sale of his property. There are often good commercial reasons why A should desire to obtain such an agreement from B. … But I stress that this is a negative agreement - B by agreeing not to negotiate for this fixed period with a third party, locks himself out of such negotiations. He has in no legal sense locked himself into negotiations with A. What A has achieved is an exclusive opportunity, for a fixed period, to try and come to terms with B, an opportunity for which he has, unless he makes his agreement under seal, to give good consideration.

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