Chapter 13: Delayed completion and Remedies Flashcards
Any delay in completion entitles the innocent party to what?
Damages caused by the delay
Can an innocent party cancel the contract if completion is delayed?
The innocent party will only have the right to cancel the contract if ‘time is of the essence’
Is time of the essence in residential contracts for sale?
Generally time will not be of the essence unless specified in the contract
When must money due on completion by received?
By 2pm on the day set for completion
If completion is delayed, how much interest is the innocent party entitled to?
Interest at the contract rate on the outstanding balance for the number of days that completion was delayed by
Contract rate = purchase price + contents - deposit
What is rental income in lieu of compensation?
If the property being sold / purchased has a tenant in situ, the innocent part can elect to take the rental income until completion instead of compensation
If completion is delayed and the innocent party wishes to withdraw or terminate the contract, what must they do?
Serve a notice to complete on the other party. In turn, this will make time of the essence.
What are the requirements for notice to complete?
- Party must be ready, able and willing to complete
- The defaulting party must complete within 10 working days (excludes date of serving the notice)
If a buyer has received a notice to complete and has only paid a reduced deposit, what must they do?
Pay any remaining balance to bring the deposit up to the full 100%
If the buyer does not comply with notice to complete which has been served on them, what can the seller do?
- Rescind contract.
- Retain buyer’s deposit.
- Resell the property.
- Claim damages.
If the seller does not comply with notice to complete which has been served on them, what can the buyer do?
- Rescind the contract.
- Reclaim deposit monies with interest at the contract date.
- Claim damages.
Which remedies are available to an innocent party following a breach of contract before completion?
- Specific performance
- Claim for compensation by way of damages
- Recission
If completion is delayed, what can an innocent party seek damages for?
Losses flowing naturally from the breach plus reasonably foreseeable consequential losses
What is the measure of damages?
Standard measure - the innocent party is entitled to be placed, so far as possible, in the position that they would have been had the contract been performed
If a buyer has breached before completion, how will the seller be limited in recovering damages?
- The seller will only be able to recover the difference in value between the contract price and the value on the re-sale.
- If the resale price is higher, the seller should retain the buyer’s deposit and not pursue a claim for damages as well.