This is an extract of our Breach Of Contract Between Exchange And Completion document, which we sell as part of our Property Law and Practice Notes collection written by the top tier of Cambridge And Oxilp And College Of Law students.
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Breach of Contract Between Exchange and Completion (Prop. Law & Practice p. 310-316)
Should it have been disclosed?
Was the contract made by deed?
What remedies are available for breach of the contract?
NON-DISCLOSED INCUMBRANCE REVEALEDIf it was latent and not clearly observable on personal inspection, then yes it should haveThe 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 right of action against seller in relation to an incumbrance under the implied covenants for title, provided that the incumbrance has been properly disclosed in the contract.If yes, then LA 1980 gives you 12 years (limitation Period to bring a claim)from date of breachIf not, then LA 1980 gives you 6 years (limitation Period to bring a claim)from date of breachCheck the contract itself for any other limitation Damages (SCPC 9.1.2) P310Buyer is only entitled to damages if there's a material difference in the value of the landIf B defaults and S makes loss on a resale, then S can claim damagesIf B defaults and S makes a profit on a resale, then this must be taken into accountDamages 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 madeNOT claim for: mental distress or pre-contract expenditure Rescission (SCPC 9.2) P312If the value is substantially reduced, rescission is availableIf error resulted from fraud, misrep. or recklessness, rescission is always availableIt 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 contractIt 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
Quantum Mitigation Credit Misrep.
Remedy expressly contained in the ContractThe remedy provided in the contract may be recession, damages or some other remedy. Quantum = contract price less market price at the date of the breach plus actual financial loss suffered as a result of the breach Claimant must show that he has made reasonable steps to mitigate his loss Must be given for compensation paid under 9.4 or for a deposit forfeited 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
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