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Wrapped: Property and Conveyancing > 15. Remedies > Flashcards

15. Remedies Flashcards

1
Q

What kind of notice will be served if the conveyancer decides that any delay is not likely to be resolved quickly?

A

A notice to complete

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2
Q

When might a conveyancer not need to service a notice to complete?

A

If time if of the essence.

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3
Q

When is time of the essence?

A

When it states so in the contract or if it is implied by surrounding circumstances.

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4
Q

What is more usual, time being of the essence or not?

A

Usually, time is not of the essence, as parties are unwilling to commit to a contract where even the slightest delay results in them committing a breach.

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5
Q

Can a party rescind the contract if the other fails to complete on the due date? What if the other delays completion unreasonably?

A

No, they cannot rescind the contract due to either.

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6
Q

What must the notice to complete include?

A

A future date by which completion must take place, in respect of which time becomes of the essence.

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7
Q

In a completion conveyancing situation, what are the two categories of circumstance where a remedy will apply?

A

Late completion
Failure to complete

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8
Q

What happens if the other party fails to meet the future date outlined on the notice to complete?

A

They commit a fundamental breach of contract. The innocent party can rescind the contract and claim damages.

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9
Q

What do the Special Conditions of Sale state about the time being of essence?

A

SC 6.1.1 = time is not initially of the essence, until the notice has been served.

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10
Q

What do the Special Conditions of Sale state about who can serve a notice to complete?

A

SC 6.8.1 = a party who is ready, able and willing can serve a notice to complete. They could complete but for the other party (discharging a mortgage doesn’t count negatively)

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11
Q

What does SC 6.8.2 stipulate about the period of notice?

A

It is 10 working days, excluding the day the notice was served.

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12
Q

What do the Special Conditions of Sale state about the deposit if a notice to complete is served??

A

SC 6.8.3 requires that the buyer make up the deposit to 10% if a lower deposit was already paid, on service of the notice to complete.

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13
Q

Which Special Condition of Sale gives a remedy if the notice to complete is not complied with by a buyer?

A

SC 7.4 - if the buyer fails to comply with a completion notice, the seller can rescind the contract a

They can keep any deposit and accrued interest, and claim damages.

Buyer returns any documents.

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14
Q

Which Special Condition of Sale gives a remedy if the notice to complete is not complied with by a seller?

A

SC 7.5 - if the sellers fails to comply with a completion notice, the buyer can rescind the contract.

The seller repays the deposit to the buyer with interest and use other remedies.

Buyer returns any documents.

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15
Q

Summarise the Special Conditions of Sale around remedies?

A

SC 6.1.1 - time is not initially of essence

SC 6.8.1 - ready and willing can serve a notice to complete
SC 6.8.2 - 10 working days notice
SC 6.8.3 - 10% deposit

SC7.2 - contract rate of interest
SC 7.4 - seller remedies
SC 7.5 - buyer remedies

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16
Q

What are open contract terms?

A

They apply to property contracts in the absence of specific terms governing certain aspects of the contractual arrangements. For example, if there is no date specified for completion, the open contract rules provide that completion will take place within a reasonable time.

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17
Q

If completion takes place after the contractual date, when will completion be considered to have taken place and what would the buyer/seller get thanks to that?

A

Parties are treated as though they had completed on the completion date.

So the seller would receive interest on the purchase price if the buyer was late.

And the buyer would be able to get rent from the seller if they stayed in occupation.

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18
Q

How do the SCS alter the open contract rules around compensation for late completion?

A

SC 7.2 states that compensation is paid by the party in default, using the contract rate of interest and the purchase price minus any deposit paid.

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19
Q

If the buyer is a tenant of the property, what do the SCS allow them to do if the sale is delayed?

A

It allows them to take the net income from the property until completion.

20
Q

Is specific performance often used?

A

No, it is rarely used because no judge wants to force a party to move house when damages suffice. This kind of claim is often linked to an alternative claim for damages for breach of contract and the claimant will usually either get one or the other.

21
Q

Does there need to be a breach to induce a specific performance?

A

No, but there is often a display showing that the other party is not willing to go ahead with the contract.

22
Q

Which remedies are from common law and which are equitable?

A

Common law = damages

Equity = specific performance.

23
Q

Is specific performance usually a buyer or seller’s remedy?

A

A buyer’s remedy.

24
Q

What is a good reason that forfeiture of deposit exists?

A

Because it gives the seller adequate compensation without the assistance of the court.

25
Q

What can the court also do if it refuses to order specific performance?

A

It can order the repayment of any deposit to the buyer. It must be all or nothing, not part of the deposit though.

26
Q

What is the difference between breaching a term of vital importance and breaching a non-essential term?

A

Vital importance: rescind the contract or affirm it and sue for damages

Non-essential: sue for damages only.

27
Q

What is the important case when considering general contractual rules and damages?

A

Hadley v Baxendale [1854] - damages are recoverable if they are reasonably considered as arising naturally from the breach, or they could have been expected by both parties as a probable result of a breach.

Loss of bargain and loss of profits.

28
Q

What is the rule for the purpose of damages?

A

That the innocent party is placed in the position they would have been in had the contract been performed.

29
Q

If the buyer defaults and the resale price is lower, what can the seller claim?

A

The difference between the contractual price and the net resale price.

30
Q

If the buyer defaults and the resale price is higher, what can the seller claim?

A

The deposit only.

31
Q

If the seller defaults and the contract price is lower than market value, what can the buyer claim?

A

The return of the deposit.

The difference between the market value and contractual price (loss of bargain)

The profit which would have been made by the buyer (e.g. from redevelopment) (loss of profit)

32
Q

When could a buyer seek damages for breaching the contracual provision of ‘vacant possession’?

A

Even after completion, the buyer can seek damages if the premises are full of rubbish which substantially prevents enjoyment of the property. This includes if a sitting tenant is still in the property.

33
Q

What must be the case in order for a party to have grounds to sue for misrepresentation?

A

The false statement of fact must have INDUCED the party to enter into the contract. Reliance on the statement must be shown.

34
Q

Can an omission counts a misrepresentation?

A

Only if the statement of fact has tried to distort the truth or something has changed and the statement-maker has not changed their statement.

35
Q

What are the 3 types of misrepresentation?

A
  1. Fraudulent, knowingly/recklessly the statement is true or false.
  2. Negligent
  3. Innocent
36
Q

What are the consequences of the 3 types of misrepresentation?

A
  1. Fraudulent = rescission and damages.
  2. Negligent = rescission (if necessary) and damages
  3. Innocent = no absolute right to damages, but could grant them if it refuses rescission.
37
Q

What are the 3 questions to ask when considering whether there is misrepresentation?

A
  1. Did the buyer reply on the misrepresentation?
  2. Remedies rely on the type - is the misrepresentation fraudulent, negligent or innocent?
  3. Is there a clause that limits/excludes liability, like SC 7.1 and is the clause reasonable?
38
Q

In the Fifth Edition of the Standard Conditions of Sale - 2018 Revision, what does Special Condition 6 state?

A

It states that neither party can rely on any representation made by the other, unless it was made in writing by the other party or their conveyancer.

This therefore aims to restrict liability for oral representations. It further states that this does not exclude liability for fraud or recklessness.

39
Q

What are the two meanings of rescission?

A

The equitable remedy of rescission, which is at the discretion of the court and brings the contract to an end.

The right to rescission, where an innocent party has the right to withdraw from the contract, forfeit the deposit and claim damages.

40
Q

What does SC 7.1 state about remedies for breach of contract?

A

It is very wide, but ultimately says the buyer is only entitled to damages and to rescind the contract if there was fraud or recklessness, or if the value of the property was substantially reduced.

41
Q

What are the remedies after completion?

A
  • Suing for covenants on the title
  • Setting the transaction aside (e.g. fraud)
  • Rectification where the transfer does not correctly give effect to the terms of the contract.
42
Q

What are the remedies availble before exchange?

A

None.

43
Q

What are the remedies available after exchange?

A

Misrepresentation
Breach of contract

44
Q

What are the remedies after the contractual completion date?

A

Notice to complete (if not done)
Misrepresentation
Covenants for title

45
Q
A

Wrapped: Property and Conveyancing (16 decks)

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