Monday, 9 December 2013

Exchange of Contracts - all or nothing (9th December 2013)

Exchange of contracts is the critical moment in a property purchase, as was highlighted to me last week. 

I was acting in a short, rollercoaster ride of a transaction for a client buying a commercial property for investment, due to be sold at auction.  I provided a title report and then the client got caught up in a pre-auction contract race.  As he sat in the sellers’ solicitors’ waiting room, ready to go in to exchange contracts, I was told that a competing buyer had beaten him to it at the auctioneers’ office. 

I thought the game was up – once there has been an exchange of contracts (which doesn’t have to be through solicitors), then that is that for other buyers.  The client was having none of it!  As it transpired, the auctioneers had not actually exchanged contracts.  They had taken a 10% deposit, shaken hands with the other buyer and agreed to withdraw the property from the marketHowever, the essential part of an exchange of contracts is that the main terms are in writing and both parties have signed (see Law of Property (Miscellaneous Provisions) Act 1989, section 2).  Without this, a contract to sell land or buildings is non-binding and, in fact, cannot even exist in law, regardless of money passing or of the intention of the parties. 

So, game back on!  An increased offer and direct pressure on the seller resulted in my client winning the race and exchanging contracts at the solicitors’ office after all.

Paul Dixon

Tuesday, 5 November 2013

A Dixon Phillips Blog (5th December 2013)

We have decided to start writing a blog to provide updates that we hope will be of interest, such as what’s going on in the office, points of law, firm news and local events that we are involved in.

If you would like to get in touch with us, or if there is anything specific you would like to see on this blog – you can now contact us by commenting on this blog or by any of the following methods:

Twitter: @dixonphillips09
Facebook: Dixon Phillips
And of course, we still like the old fashioned methods too:

Telephone: 01223 352007
Post: 22 Hills Road, Cambridge CB2 1JP

We look forward to hearing from you.