The border between French and British possessions was not well defined, and one disputed territory was the upper Ohio River valley. The French had constructed a number of forts in this region in an attempt to strengthen their claim on the territory. British colonial forces, led by lieutenant colonel George Washington, attempted to expel the French in 1754, but were outnumbered and defeated by the French. When news of Washington's failure reached British Prime Minister Thomas Pelham-Holles, Duke of Newcastle, he called for a quick undeclared retaliatory strike. However, his adversaries in the Cabinet outmaneuvered him by making the plans public, thus alerting the French Government and escalating a distant frontier skirmish into a full-scale war.
Facing defeat in North America and a tenuous position in Europe, the French Government attempted to engage the British in peace negotiations, but British minister William Pitt (the elder), Secretary for Southern Affairs, sought not only the French cession of Canada but also commercial concessions that the French Government found unacceptable. After these negotiations failed, Spanish King Charles III offered to come to the aid of his cousin, French King Louis XV, and their representatives signed an alliance known as the Family Compact on August 15, 1761. The terms of the agreement stated that Spain would declare war on Great Britain if the war did not end before May 1, 1762. Originally intended to pressure the British into a peace agreement, the Family Compact ultimately reinvigorated the French will to continue the war, and caused the British Government to declare war on Spain on January 4, 1762 after bitter infighting between King George III's ministers.
Despite facing such a formidable alliance, British naval strength and Spanish ineffectiveness led to British success. British forces seized French Caribbean islands, Spanish Cuba, and the Philippines. Fighting in Europe ended after a failed Spanish invasion of British ally Portugal. By 1763, French and Spanish diplomats began to seek peace. In the resulting Treaty of Paris (1763), Great Britain secured significant territorial gains, including all French territory east of the Mississippi river, as well as Spanish Florida, although the treaty returned Cuba to Spain.
Unfortunately for the British, the fruits of victory brought seeds of future trouble with Great Britain's American colonies. The war had been enormously expensive, and the British government's attempts to impose taxes on colonists to help cover these expenses resulted in increasing colonial resentment of British attempts to expand imperial authority in the colonies. British attempts to limit western expansion by colonists and inadvertent provocation of a major Indian war further angered the British subjects living in the American colonies. These disputes would ultimately spur colonial rebellion that eventually developed into a full-scale war for independence.