Contracts to Convey Land Flashcards
1
Q
Reasons for formalities
A
-
Evidentiary
- They are reliable evidence of creation or. location
-
Ritual / cautionary
- They require the owner to pause and think about whether they really want to do this
- It makes the action more formal and considered
-
Protective
- Safeguards against undue influence and fraud [LPA(MP)A 1989 s2; Statute of Frauds 1677, s4]
-
Channelling
- Formalities standardise transactions and the rights in them
- You need it in writing according to a certain formality
2
Q
Failure to comply
A
- If you do not comply with these requirements, the purported right is usually void
- Because of the high value and important of land, the sanction for failing to comply is usually that the right is only effective against the grantor and sometimes not even them.
- Continental law is stricter; in the Anglo (Common-Law) system, equitable principles alleviate the harshness of the strict application of legal rules
3
Q
Distinctions of formalities
A
- Agreeing to do something (e.g. contract) is opposed to actually doing something (e.g. executing a deed)
- Creating new rights (original rights) as opposed to transferring existing rights (an assignment of rights)
- Formalities for legal estates and interests as opposed to those for equitable interests
- You can create a right orally, but if you want to transfer the right, you must do it in writing
4
Q
Contracts for the sale of land v contracts for the sale of goods
A
- Contracts for the sale of land are different from contracts for the sale of goods in several important respects. First, legal title to land does not pass when the contract is made.
- The contract is a promise to pass title, which is performed later by conveyance.
5
Q
When is a cotract to dispose of an interest valid?
A
- A contract to dispose of an interest in land is not valid unless it complies with the formalities set out in s2 Law of Property (Miscellaneous Provisions) Act 1989.
6
Q
Are contracts for the sale of land specifically enforceable?
A
- Most contracts for the sale of land are specifically enforceable, which means that the purchaser can compel the vendor to transfer title and does not have to settle for damages for non-performance.
- This is because an award of damages is not an adequate substitute for performance since the purchaser cannot obtain the same land from anyone else. In contrast, most contracts for the sale of goods are not specifically enforceable, unless the goods are hard to obtain.
7
Q
Contracts to create or transfer a legal interest in land
A
- s2 LP(MP)A 1989:
- The contract is an enforceable promise to pass (or create) title (by deed).
- Must be in writing, incorporating all terms in one document and signed by all parties.
- Contract does not create or transfer a title to land, it simply creates a binding promise to do so in future
- Contracts to the sale of land are different to that to the sale of goods. In selling chattel, the contract transfers the goods, whereas with land, legal title does not pass when the contract is made (it is simply a binding promise to do so in future)
- A contract to sell land is not valid unless it complies with s2 LP(MP)A 1989. There is no such thing as part performance
-
Specific performance is the default remedy for contracts in land: the purchaser can compel the vendor to transfer the title later
- An award of damages is not sufficient in land, because the property is unique
8
Q
Creation or transfer of legal interests
A
- S52 LPA: must be by deed
- Exceptions:
- Short leases (3 years and under)
- An estate acquired by adverse possession
- Rights arising by long user (a way of acquiring an easement – trespassing land for 20 years gives you the right to go on that land)
- Exceptions:
- S27(1) LRA: must be completed by registration
- It will not have power against third parties unless it is properly registered
- Exceptions
- Short leases
- Long user
- Adverse possession
- S2 Law of Property (Miscellaneous Provisions) Act 1989
- (1): “A contract for the sale or other disposition of an interest in land can only be made in writing and only by incorporating all the terms which the parties have expressly agreed in one document or were contracts are exchange, in each
- (3) … must be signed by or on behalf of each party to the contract
9
Q
Creation of equitable interests in land
A
- Equity prefers bargains not gifts
- Sometimes there is no formality when acquiring land
- Often there is no formality, but interests in an express trust must be evidenced in writing [s53(1)(b) LPA 1925]
- Not if the trust is implied
- Whenever somebody holds land on trust, the right is unenforceable unless there is written evidence
- By specifically enforceable contract
- The doctrine of anticipation in Walsh v Lonsdale
10
Q
Doctrine of anticipation
A
- Doctrine of anticipation: equity looks on as done that which ought to be done
- An enforceable contract is executed in equity to give an equitable estate or interest according to the terms and conditions in the contract
- To find that an interest has been created in equity, you need:
- A contract that complies with s2 LP(MP)A so as to be enforceable
- The application of the doctrine in Walsh v Lonsdale
11
Q
Walsh v Lonsdale
FACTS
A
W agrees in writing to lease mill for seven years from L for 30s pa, payable in advance. No deed executed. W occupied mill and paid in arrears. L later demanded rent in advance as per contract. W refused. L distrained W’s equipment (distrain: when a landlord seizes your goods until you pay the outstanding rent). W sued L for unlawful distress; argued that no legal lease created and so had only a “tenancy year
12
Q
Walsh v Lonsdale
HELD
A
- “There is only one Court, and the equity rules prevail in it. The tenant holds under an agreement for a lease. He holds, therefore, under the same terms in equity as if a lease had been granted, it being a case in which both parties admit that relief is capable of being given by specific performance. That being so, he cannot complain of the exercise by the landlord of the same rights as the landlord would have had if a lease had been granted”
- The distress was lawful
13
Q
Absence of formalities
A
- Resulting, implied or constructive trusts: s53(2) LPA and 2(5) LP(MP)A: section 2 does not affect the creation or operation of such trusts
- Estoppel: note that these are not methods of enforcing an unenforceable contract (it does not get around s2 and subvert the statute). Estoppel generates rights outside of contract, so these are not truly ‘exceptions’
- But note that these are not methods of enforcing an unenforceable contract. They generate rights outside of contract, and so are not truly “exceptions”.
- No “part performance”: abolished by repeal of s 40(2) LPA 1925. Different from estoppel
- Adverse possession: vests an ‘original’ (and legal) title in the adverse possessor, not a transfer from the paper owner
- Acquisition of easements by long user depends on legal fiction of a grant that has been lost
- Short leases (including periodic tenancies) are too short to impose the burden of requirements
- These interests are always legal, never equitable
14
Q
Estoppel
A
- LP(MP)A s2(5) does not mention estoppel
- Ingredients of estoppel:
- Representation
- Which causes someone to rely to her detriment on it
- Must have a causal link (but for test)
- It is not the failure to perform the unenforceable contract, but the assurance that the unenforceable contract will be honoured despite the lack of formalities (Dixon’s ‘double assurance’ theory)
- An assurance that you will get the right, and one that you will get despite the lack of formalities
15
Q
Crabb v Arun DC
FACTS
A
- Facts: Crabb owned land with access at point A along a road owned by ADC. The parties agreed orally that C could have an easement at point B, and so ADC built a fence along C’s land installing gates at point A and B. Crabb sold plot A with access to the public highway and kept the land at B. ADC then removed the gate, and built a fence across the point B, leaving Crabb with no access
