Crest Nicholson (Londinium) Ltd v Akaria Investments Ltd

Crest Nicholson (Londinium) Ltd v Akaria Investments Ltd

The Court of Appeal held that the letter of 21 June 2007 and subsequent correspondence did not constitute an offer capable of acceptance to fix the open market rents for unlet units as the target rents for the purposes of clause 19.8.1. The correspondence, when read in context, merely sought confirmation of what was already agreed or recorded the parties' understanding, and did not invite agreement to a new proposal. Therefore, no binding contract was formed on this point.

Parties
Claimant/respondent: Crest Nicholson (Londinium) Limited; Defendant/appellant: Akaria Investments Limited
Jurisdiction
England and Wales
Judgment Date
25 November 2010
Procedural Posture
Civil Appeal / Appeal From High Court (chancery Division) on Preliminary Issues
Outcome
Appeal allowed
Legal Topics
Formation of Contract, Offer and Acceptance, Interpretation of Contracts, Development Agreements, Profit Sharing Provisions
Contract Law Commercial Law Formation of Contract Offer and Acceptance Interpretation of Contracts Development Agreements Profit Sharing Provisions

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Parties

Crest Nicholson (Londinium) Limited

Claimant/respondent

Akaria Investments Limited

Defendant/appellant

Procedural Posture

Civil Appeal / Appeal From High Court (chancery Division) on Preliminary Issues

Legal Issues

  1. 1 Whether correspondence between parties constituted an agreement to fix open market rents for unlet units under a development agreement
  2. 2 Whether the letter of 21 June 2007 and subsequent emails amounted to an offer and acceptance capable of forming a binding contract

Ratio Decidendi

The Court of Appeal held that the letter of 21 June 2007 and subsequent correspondence did not constitute an offer capable of acceptance to fix the open market rents for unlet units as the target rents for the purposes of clause 19.8.1. The correspondence, when read in context, merely sought confirmation of what was already agreed or recorded the parties' understanding, and did not invite agreement to a new proposal. Therefore, no binding contract was formed on this point.

Court Disposition

Appeal allowed

Orders

  • The order of the High Court is set aside.