Supreme Court ruling on "option to purchase" clause

Posted on 2010-11-17 in General

The Supreme Court have today issued their judgement in the appeal case of Multi-Link Leisure Developments Limited (Appellant)  v North Lanarkshire Council (Respondent).

The parties had entered into a 50 year commercial lease in 1999 which contained an "option to purchase" clause. The Appellants duly sought to excercise their right to buy the land from Respondents and the Respondents fixed a price for the land which took into account the fact that the land now had potential for residential development.

The Respondents argued that they had no right to take into account the "hope value" for the residential development as the original use of the land was going to be for a golf course and it was simply fortuitous that the potential for residential development was now discovered.

It was held that the Respondent was entitled to take into account the "hope value" when determining the option price as that was what the original intention of the parties must have been despite the poorly drafted contract.

To read the full judgement, please click here.