Landowners including overage clauses in sale agreements should be made aware that the courts will not help to rectify a bad bargain.

This recent case concerned an overage provision in a sale contract which included an uplift to allow for house price inflation at the time planning permission was granted. The uplift was calculated by reference to the difference between the estimated sales price per net square foot of residential development at the date of the sale agreement and at the date on which planning permission was granted. When planning permission was granted the landowner received no uplift as the estimated sales price specified in the agreement was far too high - there was no difference between the two figures.

The court refused the landowner's claim to rectify the agreement because his mistake was one of value. On the facts of the case the landowner's additional claim that the developer had been deceitful succeeded. The landowner had relied on the developer's estimated residential sales value which had been given fraudulently. However, the message here is clear: the courts will not rectify an agreement purely on the grounds that it is heavily in one party's favour.

Connolly v Bellway Homes Ltd