An injunction is highly unlikely and damage is limited; Therefore, if a seller receives an increased offer from another person during the exclusivity period, he or she could decide to violate the lockout agreement, sue with the other party and pay the minimum amount of damages for the violation. Lockout agreements help the buyer make the purchase by giving him time to make the necessary preparations. If you need advice on lockout contracts, please contact one of our real estate experts. We believe that buying real estate is an exciting but discouraging process, and we are here to help. Where first-class real estate is scarce and a number of potential buyers are chasing the same deal, lockout agreements may seem attractive. However, there are three important issues that buyers and sellers should consider: until a sales contract is exchanged, a seller can withdraw without charge or consequence. A lockout or exclusivity agreement that prevents a seller from negotiating with another party during the prohibition period may offer short-term protection to a potential buyer. It gives time to conduct investigations and due diligence and to negotiate documents so that the potential buyer is willing to trade in front of other potential buyers. A lockout agreement must not be enforceable in writing and must not comply with the technical requirements for land contracts of the Dasasie Act (Various Provisions) of 1989, as it is not an agreement to sell land. Of course, it is preferable for both parties to have the agreement written down, otherwise there will be more leeway for disputes over agreed terms. Lockout contracts can therefore offer a potential buyer a short period of protection during which they can continue due diligence. However, if a potential buyer is looking for longer-term protection when he decides whether he wants to continue or not, then the lockout is not the answer. Instead, the buyer should consider agreeing to a “purchase option” with the seller.

What is the status of the seller if the seller is convinced during the lockout agreement that the buyer will not continue and that he wants to make an alternative offer immediately (for example. B to get a sale before the end of the year). As a result, the seller violates the lockout agreement. What are their potential liabilities? A lockout agreement is enforceable (and the parties are liable for any breach of their obligations) only if the following conditions are met: this means that a handshake agreement is non-binding and has no effect if a party tries to break a promise. It is tempting to view the use of a lockout agreement as an appropriate way to keep the parties to their word until the mechanics of the promotion process catch up and conclude a formal exchange.