Legally, a lockout contract must not be a written and duly signed agreement as long as a formal sales contract must be in place. It can be recorded in correspondence, or even agreed orally, and is legally applicable in both cases. However, sellers should be very careful to exclude other than formal writing, especially when the buyer pays some form of non-refundable down payment. As in all property cases, parties should seek legal advice at an early stage to ensure that the conditions of blocking are the property. In any case, a contract to pay such a down payment or penalty does not in itself offer complete protection to a buyer. Such a bond was paid or promised by Allied Domecq as part of exclusive agreements with Whitbread regarding the well-known sale of Whitbread-allied pubs. Although there was a $25 million payment that Allied Domecq should have paid Whitbread due to injury, punch Taverns did not rule out successfully offering (totally unsolicited and without any Allied support) and acquiring these ads. However, for a lockout agreement to be applicable, it is not mandatory to execute it in a written format. The parties can explicitly enter into a lockout agreement, but it is always advantageous for the parties to give it a written form, as it will serve as more concrete evidence if things go wrong. Due to the nature of the exclusivity agreements and the need for precise development, the time required to negotiate and adopt the agreement is not unheard of to take a few weeks. The reality is that the time spent discussing and drafting the text of an exclusivity agreement would be much better spent on concluding the transport work and trying to move the transaction over the line. The contract generally allows the buyer to recover “wasted costs” when the seller violates his obligation, which generally means the mitigation costs that entail the buyer`s transportation costs.
However, an aggrieved party would not be able to file an application for forced sale of the land or damages in court. Courts are often reluctant to force the sale of real estate unless there are usual and urgent circumstances related to the failure of the purchase. The quintessence is that a lockout contract can prevent a seller from looking for other buyers, but cannot require a seller to exchange contracts with you.