Completion remedies Flashcards
How can you vary the completion day after exchange of contracts?
You have to incorporate the variation to the contract in accordance with s.2 of LP(MP)A.
If you find fault in the completion date, the Court of Appeal will not allow letters that set out a new date. The solicitors should have inserted the correct date and then re-exchanged the contracts.
What does SCPC 9.1.2 provide?
If completion does not take place by 2 pm on the relevant day, then, for the purposes of calculating compensation under SCPS 10.3, completion is deemed to occur on the next working day.
Why does SCPSs provide a more effective remedy than contractual remedies?
They provide for the buyer to make payment to the seller of specific compensation for delay irrespective of whether any loss is suffered by the seller.
Where can you find the amount of compensation?
It is set out on the front page of the contract (the ‘contract rate’). It is a pre-agreed compensation rate.
This is usually 4% per annum above the base rate.
What happens when no contract rate is specified to compensate the completion delay?
SCPC 1.1.1(e) applies by default and the interest rate will be ‘the Law Society Interest Rate; which is equivalent to 4% per annum above the base rate of Barclays Bank plc
What does SCPC 9.1.1 confirm?
It confirms that time is not of the essence until a notice to complete has been served.
When is time of the essence?
Time will be of the essence
• if there is a specific contractual provision
• by implication from the surrounding circumstances - the sale of a business as a going concern where delay could have a material and adverse effect on the business
• after correct service of a notice to complete
What is the remedy if time is not of the essence regarding the completion date?
A delay in completion will amount only to a breach of warranty. This is actionable only in common law damages and does not entitle the injured party to rescind the contract.
What does SCPC 9.8 provide?
Under SCPC 9.1.1, time is not of the essence in a contract until a notice to complete is served pursuant to SCPC 9.8
The party proposing to serve the notice must be ready, able and willing to complete before a notice to complete can be validly served.
What’s the effect of service of a notice?
To create a final date for completion and thereby make time of the essence in respect of this date.
What does SCPC 9.8.2 provide?
The notice to complete requires the parties to complete within 10 working days of service of the notice (excluding the day of service)
If the seller rescinds the contract, he can also:
- forfeit the deposit and any accrued interest
- resell the property and any contents included in the contract
- claim damages for breach of contract at common law.
Other rights and remedies under common law, such as specific performance.
If the buyer rescind the contract, he can
Demand repayment of the deposit plus accrued interest.
Neither the seller nor the buyer will be entitled to contractual compensation under SCPS 10.3
What is the remedy for a material difference between the property as represented by the seller and the actual property?
Damages SCPC 10.1 (a)
When can the buyer rescind the contract if the error or omission made by the seller is as a result of?
Fraud
Recklessness
There is a substantial different in quality, quantity or tenure
