Pitt v PHH Asset Management Ltd [1994] 1 WLR 327 is an English contract law case, which confirmed the enforceability of lockout agreements.

PHH Asset Management Ltd were undisclosed agents of mortgagees, who were selling The Cottage for £205,000.

Mr Pitt was invited to increase his offer but declined as he didn't want to enter a bidding war.

The Sales Agent subsequently invited the two parties to submit sealed bids to which Mr Pitt agreed provided were he to submit the successful bid then the vendor would not consider further offers.

This is known as a "lock-out agreement" with Mr Pitt ready, willing and able to proceed to completion of the purchase within a 2-week period on receipt of the draft contract.

Mr Pitt submitted the highest of the sealed bids and believed PHH Asset Management Ltd on behalf of the vendor were contractually committed to sell to him.

Mann LJ agreed and Sir Thomas Bingham MR gave the following judgment.

The vendor celebrates, relaxes, makes plans for his own move and takes his house off the market.

The reasons why purchaser and vendor can act in this apparently unprincipled manner are to be found in two legal rules of long standing: first, the rule that contracts for the sale and purchase of land must be evidenced (or now made) in writing; secondly, the rule that terms agreed subject to contract do not give rise to a binding contract.

They make possible the behaviour I have described, but the validity and merits of those rules are not, and could not be, the subject of challenge in this appeal.

The vendor does not agree to sell to that purchaser, such an agreement would be covered by section 2 of the Act of 1989, but he does give a negative undertaking that he will not for the given period deal with anyone else.