Cases - Regalian Properties v London Docklands Development Corporation
Record details
- Name
- Regalian Properties v London Docklands Development Corporation
- Date
- [1995]
- Citation
- 1 WLR 212
- Legislation
- Keywords
- Contract - intended contract - property developer incurring substantial expenses - negotiation costs - contract preparation costs - negotiations subject to contract - whether the costs incurred in negotiating a contract were recoverable
- Summary
-
In 1986 the claimants tendered a sum of £18.5m for a licence to build as and when the defendant owners of the land obtained vacant possession of separate parts of it. The defendant accepted the offer subject to '(1) contract (2) the district valuer's certificate of market value (3) your scheme achieving the desired design quality and the obtaining of detailed planning consent.'
By 1988 the value of residential property had fallen to an extent which made the proposed development uneconomic for the plaintiffs on the terms agreed. No contract was ever entered into. The claimants claimed from the defendant significant sums that had been incurred on fees paid to experts of one sort or another both for the purpose of producing detailed designs for the proposed development, obtaining detailed costings and in commissioning site investigations etc. in preparation for a speedy start to the development once the building lease was entered into. The claim failed. It was held that each party to the negotiations must be taken to have known (as the claimant did in the present case) that pending the conclusion of a binding contract, any cost incurred by him in preparation for the intended contract would be incurred at his own risk, in the sense that he would have no recompense for those costs if no contract resulted. By deliberate use of the words 'subject to contract' with the admitted intention that they should have their usual effect, the parties each accepted that in the event of no contract being entered into, any resultant loss should lie where it fell.