Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Lock-out agreement definition

What does Lock-out agreement mean? A lock-out agreement (also called an exclusivity or no-shop agreement) is a time-limited promise that one or both parties will not negotiate with, solicit or accept competing proposals for the same transaction while they progress their own deal. Common in property and corporate/M&A transactions, it protects investment in due diligence and drafting of heads of terms or definitive documents. It is not defined by statute; enforceability arises under contract law. In England and Wales and Northern Ireland it is generally enforceable as a negative obligation if supported by consideration and if scope and duration are certain. It is distinct from a...

Lock-out agreements and alternatives in contract negotiations under English law: enforceability, drafting, remedies, options, pre-emption and break fees

Published by a LexisNexis Commercial expert

Practice notes

This Practice Note looks at exclusivity within contract negotiations. It covers negotiations and agreements to agree, exclusivity or lock-out arrangements, the obligation to negotiate in good faith, options, rights of first refusal or pre-emption, and break fees. For a template exclusivity agreement, see Precedent: Exclusivity agreement—commercial contracts.

Negotiations and agreements to agree

Talks between parties to reach and close a transaction can be protracted, complex and subject to numerous amendments to terms. Considerable time and expense, including lawyers’ and accountants’ fees, are often incurred, which may ultimately be wasted if consensus is not reached and the deal is not finalised. Circumstances may shift owing to external influences, and findings from enquiries can alter the value of the subject of the deal as well as each side’s bargaining position. Where parties are contemplating a collaboration, joint venture or joint tender, there is frequently a period of due diligence in which they assess how they might work together and set out respective roles and responsibilities. This is understandable and generally regarded as sensible. Nonetheless, a negotiating party may be less forgiving on discovering that the transaction they have been negotiating has been...

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Web page updated on 21/05/2026

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