ChD 29 January 1988. Action by tenants (H) seeking determination as to whether an initial exchange of letters between H and the landlords (S) constituted a binding contract with regard to the amount of reviewed rent. A rent review notice had been sent to H by S`s surveyor; headed " without prejudice " and " subject to contract " proposing a new rent of £26,944pa in place of the existing rent of £16,682pa. H was invited to notify acceptance, in which event a memorandum would be prepared. H notified acceptance, but, on receipt of the formal memorandum for signature, H wrote back saying there had been a misunderstanding and they could not agree to the proposed rent. S argued that the exchange of letters constituted a binding contract. Case law on the "subject to contract" formula were reviewed and the judge enumerated several basic principles . He rejected a number of suggested reasons put forward on behalf of S as to why the words in the present case did not have their prima facie mean