Agreement conditional on landlord’s consent

In British Telecommunications Ltd v Rail Safety and Standards Board Ltd ([2012] EWCA Civ 553, CA (Eng)) BT agreed to grant two sub-leases of office premises to RS. The agreement was conditional on obtaining the head landlord’s consent (in terms agreed between BT and RS) to the underlettings and to certain alteration works. If the consents had not been granted by 5 October 2007 then either party could serve notice to determine the agreement. On 16 October 2007, the head landlord’s solicitor told BT that she had the licences in the agreed form executed by her clients. She was ready to complete them once she received the fees payable in respect of them. On 20 November 2007 RS served notice to terminate the agreement for the underleases. BT claimed damages for breach of contract. The English Court of Appeal decided that RS had been entitled to terminate. It was a question of the proper interpretation of the contract. There was no ambiguity in its express terms and RS was entitled to terminate at any time before the licences had been formally granted. There was no room for a construction of the contract that would substitute a willingness to grant the licences for the formal grant of them.

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