What will preclude the formation of a binding oral agreement to vary a lease?

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In Sparway Pty Ltd v Lakkis [2017] NSWSC 146 a lessee argued that a legally enforceable contract to vary the lease arose in a conversation with the lessor. However the lessor stated that he would first need to consult his nephew, who was his business manager, before making a decision. The Court held that this meant the lessee did not intend to be immediately bound by the conversation. It was irrelevant that the lessor stated that there was “a deal”, and that they discussed the drafting of documents and shook hands. Accordingly the court held that there was no binding oral agreement to vary the lease.

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