Negotiating lockout agreements can take time. They can therefore sometimes be seen as a distraction from the main transaction. A potential buyer already has some protection under the rules of professional conduct in contract races that prevent a seller`s lawyer from sending a contract of sale to a potential second buyer, without notifying the lawyer who is acting for the first potential buyer who has already received a draft contract. A lockout agreement is only applicable (and the parties are responsible for the breach of their obligations) if the following conditions are met: the transfer process can take a long time. For buyers, the existence of a lockout agreement gives a sense of security that no one will be able to buy the property they are in the buying process. It prevents the seller from receiving further offers during the period covered by the blocking agreement. A lock-up is a contractual provision that prevents insiders of a company from selling their shares for a certain period of time. They are often used as part of the initial public offering (IPO). Second, a buyer is entitled to damages for the infringement. In the past, courts have focused on the buyer`s wasted costs to calculate the amount of damage.

However, there is an argument that the damage should still be limited. Even if the lockout agreement was not violated, the transaction may not have been completed and the buyer would have had to face uncollectible costs. It could therefore be argued that the damage should be limited to the additional wasted costs caused by the infringement committed by the seller.