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LPC Law Notes Property Law and Practice Notes

Breach Of Contract Between Exchange And Completion Notes

Updated Breach Of Contract Between Exchange And Completion Notes

Property Law and Practice Notes

Property Law and Practice

Approximately 490 pages

A collection of the best LPC PLP notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through dozens of LPC samples from outstanding students with the highest results in England and carefully evaluating each on accuracy, formatting, logical structure, spelling/grammar, conciseness and "wow-factor".

In short these are what we believe to be the strongest set of PLP notes available in the UK this year. This collection of notes is fully updated for recent exams, a...

The following is a more accessible plain text extract of the PDF sample above, taken from our Property Law and Practice Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:

(Prop. Law & Practice p. 310-316)

NON-DISCLOSED INCUMBRANCE REVEALED

Should it have been disclosed?
  • If it was latent and not clearly observable on personal inspection, then yes it should have

  • The seller has a duty of disclosure (SCPC 9.1.2)

  • So, the buyer will have a cause of action for breach of this element of the contract

T&F NOTE buyer has no rightof action against sellerin relation to an incumbrance under the implied covenants for title, provided thattheincumbrance has been properly disclosed in the contract.

Was the contract made by deed?
  • If yes, then LA 1980 gives you 12 years (limitation Period to bring a claim)from date of breach

  • If not, then LA 1980 gives you 6 years (limitation Period to bring a claim)from date of breach

  • Check the contract itself for any other limitation

What remedies are available for breach of the contract?

P310

Damages (SCPC 9.1.2) P310

  • Buyer is only entitled to damages if there’s a material difference in the value of the land

  • If B defaults and S makes loss on a resale, then S can claim damages

  • If B defaults and S makes a profit on a resale, then this must be taken into account

  • Damages will be awarded under the Hadley v Baxendale principle (losses naturally flowing from the breach) and any reasonably foreseeable consequential loss that was foreseeable when the contract was made

  • NOT claim for: mental distress or pre-contract expenditure

Rescission (SCPC 9.2) P312

  • If the value is substantially reduced, rescission is available

  • If error resulted from fraud, misrep. or recklessness, rescission is always available

  • It is the restoration of the parties to their original position by undoing the contract and paying compensation to balance their positions

Specific Performance of the contract

  • It is an equitable remedy and therefore entirely at the discretion of the court however, orders for Specific Performance are not uncommon since no two pieces of land are identical and damages may not be therefore adequate or appropriate compensation for breach

Remedy expressly contained in the Contract

  • The remedy provided in the contract may be recession, damages or some other remedy.

Quantum Quantum = contract price less market price at the date of the breach plus actual financial loss suffered as a result of the breach
Mitigation Claimant must show that he has made reasonable steps to mitigate his loss
Credit Must be given for compensation paid under 9.4 or for a deposit forfeited
Misrep. T&F NOTE A buyer may have a cause of action against the seller for negligent misrepresentation under the Misrepresentation Act 1967. The action would be for rescission of the contract and damages. But, if contract incorporated SCPCs, SCPC 9.1 limits the remedies available to the buyer.

THREATEN NOT TO COMPLETE

While this isn’t a breach of contract, it would be prudent for the other party to apply to court for a Specific Performance Order (“SPO”) requiring the other party to complete their obligations under the contract (Hasham)

Note that SPO will not be awarded where: damages in lieu would be adequate (s.50 SCA); a third party has acquired an interest in the property; the seller cannot make good title to sell

Late Completion

(SCPC 9.3) P310 Any delay will result in a breach of contract entitling the injured party to compensation for the period between completion date and actual completion and any damages for any loss suffered as a result of the delay (Raineri v Miles (1981)) but will not entitle him to rescind the contract (SCPC 9.3.1), unless time was of the essence. After notice to complete has been served (SCPC 8.8.1) party at fault will have 10 working days to complete (SCPC 8.8.2). If party at fault continues to delay completion even after Notice (notice makes “time of the essence” a condition of the contract binding on both parties) the innocent party may rescind the contract (SCPC 9.5 (for buyer)) and (SCPC 9.6 (for seller)) and damages etc (Hadley v Baxendale (1854)) may be awarded to the innocent party. Apply to the facts: are there any other buyers around to sell to? What condition is the property market in? See diagram (based on SCPC not SC):

Calculating Compensation: at the Contract Rate (1.1.1(e))
Purchase price 1,000,000
Less deposit (100,000)
Balance due 900,000 Check the contract to see what was the...

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