lock-out agreement

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A contract between a potential purchaser and the vendor of a property in which the vendor agrees that for a fixed period, such as two weeks, he will take the house off the market and not accept any other offers. Meanwhile the purchaser moves towards a quick exchange of contracts, with the aim of securing the sale within that period. If the vendor breaches the agreement by accepting another offer, he can be sued for breach of contract. Many vendors will not accept such agreements and some lawyers have argued they are unenforceable.

Subjects: Law.

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