Coaten v PBS Corporation

Coaten v PBS Corporation

Clause 1(a)(ii) of the Agreement created an option, not a right of pre-emption, because it imposed an obligation on the Defendant to sell upon the death of Mr Bacardi within 21 years, subject to the Claimant's acceptance. The machinery for determining the price and acceptance constituted the exercise of the option. The parties intended to confer an immediate right to acquire the property upon the specified event, and the Defendant was bound to make the offer, distinguishing it from a mere right of pre-emption.

Parties
Claimant: Michael Coaten; Defendant: PBS Corporation
Jurisdiction
England and Wales
Judgment Date
18 July 2006
Procedural Posture
Civil / Judgment
Outcome
Claim allowed
Legal Topics
Options and Pre Emption Rights, Sale of Land, Construction of Contracts, Specific Performance
Property Law Contract Law Options and Pre Emption Rights Sale of Land Construction of Contracts Specific Performance

Case Brief

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Parties

Michael Coaten

Claimant

PBS Corporation

Defendant

Procedural Posture

Civil / Judgment

Legal Issues

  1. 1 Whether clause 1(a)(ii) of the Agreement created an option or a right of pre-emption in favour of the Claimant
  2. 2 Whether the exercise of the right complied with statutory requirements for contracts for sale of land

Ratio Decidendi

Clause 1(a)(ii) of the Agreement created an option, not a right of pre-emption, because it imposed an obligation on the Defendant to sell upon the death of Mr Bacardi within 21 years, subject to the Claimant's acceptance. The machinery for determining the price and acceptance constituted the exercise of the option. The parties intended to confer an immediate right to acquire the property upon the specified event, and the Defendant was bound to make the offer, distinguishing it from a mere right of pre-emption.

Court Disposition

Claim allowed

Orders

  • Specific performance ordered; parties to settle the minute of order upon handing down of judgment