Banner Homes Group plc v Luff Developments Ltd [2000] Ch 372 [2000] 2 All ER 117
In this case competing building companies agreed not to bid against each other for the purchase of some land, however one proceeded and the other asserted that the land was then held on trust for the two parties as a joint venture.
Held: There was no formal agreement but the first company had allowed its position to be worsened relying upon the expectation which the second party had allowed to arise.
They had not informed the claimant before the purchase of its intention not to honour the agreement.
Chadwick LJ: "It is clear, therefore, that, to Banner's knowledge, exchange of contracts was to occur, and did occur, before the parties were signed up to any formal written agreement. It is equally clear that Luff had given Banner to understand that it was content to exchange contracts without requiring any form of separate guarantee committing Banner to contribute one half of the costs of the net site and that the reason for this was that the mutual rights and obligations of the parties would be set out in the shareholder agreement. It is also clear that both sides intended to enter into the shareholder agreement as soon as possible, the only reason for the delay being Mr. Vass's absence on holiday. At no stage was any indication given that reasons existed why the agreement should not be entered into. Specifically nothing was said on either side to indicate that any difference of principle existed which would prevent the parties from agreeing terms."
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