Court of Appeal confirms compensation is payable in property deal despite no written contract
International law firm Bird & Bird has been representing property developer Jim Cobbe in a dispute with significant implications for parties who make oral agreements concerning property. Earlier this week, the Court of Appeal confirmed that Mr Cobbe was entitled to be compensated for the breach of an oral agreement to develop a property and to share its total sale value.
Mr Cobbe had an oral agreement with the owner of a block of flats in Knightsbridge to develop it and share the total sale value. He fulfilled his part of the bargain by obtaining planning permission to develop the property (and therefore adding considerable value to it), but the owner reneged on their oral understanding.
In February 2005, the High Court ruled in Mr Cobbe’s favour that, despite there being no written contract between the parties, he should receive a share in the increase in the value of the property having spent considerable time and money getting the planning permission in reliance on his oral agreement.
Bird & Bird lawyer, Peter Emanuel, who worked on the case, said:
“This decision of the Court of Appeal is very welcome. There was some surprise in the property world when the original judgment came out because, before then, a lot of people quite wrongly believed that if there was nothing in writing then they were free to back out of a property deal whenever they wanted to. Now we have confirmation that, in appropriate cases, the Courts will not allow someone to walk away from an oral agreement concerning property and if they do that they may have to compensate the injured party. The Court of Appeal’s judgment will have significant implications for many property dealings”.
For more information on this case, please contact Peter Emanuel on +44 20 7415 6000.
For more information on Bird & Bird please call Natalie Arestis on +44 20 7905 6248.
Notes to Editors
About Bird & Bird
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