BDW Trading Ltd (t/a Barratt North London) v JM Rowe (Investments) Ltd

A contractual condition precedent may give each party a free-standing right to terminate if it remains unsatisfied by the specified date. Exercise of that right does not depend on breach, loss or prejudice. Where the contract permits termination at any time, the right ordinarily remains exercisable until completion unless waived, varied, rendered unenforceable by estoppel, or otherwise lost under the contract.

Continuing negotiations do not amount to election or waiver without a conscious decision, or conduct clearly communicating abandonment of the right. A party cannot rely on non-fulfilment of a condition caused by its own unremedied breach, but an unrelated breach does not necessarily prevent termination. A specific performance order may be inappropriate where performance requires continuing co-operation between the parties.

Under an agreement for the sale and development of commercial property, the purchaser paid a deposit and obtained rights to refuse completion until specified matters concerning an existing tenant, separation works and related documentation had been satisfied.

The conditions were not satisfied by the contractual date. The parties nevertheless continued negotiating. The purchaser later served notices purporting to terminate under the contractual condition. The vendor challenged the notices, alleging breach of reasonable-endeavours obligations, election, waiver, estoppel and reliance on the purchaser’s own breach. The purchaser sought return of its deposit, while the vendor counterclaimed for specific performance and damages.

The central issues were whether the termination rights had accrued, whether they remained exercisable, and whether the purchaser was contractually barred from relying on the unsatisfied conditions.

1. Termination rights. Clause 6 created conditions precedent to completion and gave either party a free-standing right to terminate if any relevant condition remained unsatisfied by 7 July 2008. Non-fulfilment was not itself a breach. The right could be exercised at any time thereafter until completion, subject to waiver, estoppel, variation, the express proviso, or another disabling breach.
2. Clause 6.2(vi). The requirement for confirmation that sums due to A & L had been paid was independent of vacant possession. The lease had terminated, and the payment obligation arose on termination. Any different arrangement between the vendor and A & L did not vary the purchaser’s contractual entitlement to the required confirmation. The vendor took the risk of failing to provide it.
3. Election and waiver. Continuing negotiations after the right accrued did not constitute election, waiver or estoppel. Those doctrines required active conduct, including a considered choice, abandonment, or conduct on which the other party reasonably relied. The evidence showed that neither party had addressed the accrued termination right.
4. Reasonable endeavours and own wrong. The purchaser had not breached its obligations under clauses 6.2(iii) or 15.5. Earlier delays were cured before the termination rights arose, and the outstanding warranties had not been agreed through no fault of the purchaser. The contractual proviso barred reliance where the terminating party was in breach of clause 6.2, while the general principle against profiting from one’s own breach applied where that breach caused the relevant non-fulfilment.
5. The two notices were valid and terminated the agreement. The vendor’s counterclaim was dismissed. Any damages inquiry concerning the earlier delay was left open if the decision were successfully challenged. Specific performance would in any event have been inappropriate because it would require continuing co-operation, although this was obiter.

First-instance decision. No appellate history is stated in the judgment.