Delay or Failure to Complete Flashcards
What is the usual remedy available under the Standard Conditions of Sale when a buyer fails to complete on time?
A. The seller may automatically rescind the contract
B. The seller can charge the buyer interest on the purchase price
C. The buyer forfeits the entire purchase price
D. The buyer can extend completion by seven days
B. The seller can charge the buyer interest on the purchase price
Explanation: Under SCS, if the buyer is late completing, the seller is entitled to contractual interest (usually at the Law Society interest rate) on the balance of the purchase price for each day of delay.
What is the effect of serving a notice to complete under the Standard Conditions of Sale?
A. It terminates the contract automatically after 24 hours
B. It requires both parties to complete within five working days
C. It makes time of the essence and gives 10 working days to complete
D. It gives the seller the right to sue for damages immediately
C. It makes time of the essence and gives 10 working days to complete
Explanation: Once a notice to complete is served, the contract becomes time-critical, and both parties have 10 working days to complete from the day after service.
In a standard residential transaction using SCS, if the seller fails to complete, what is the buyer entitled to?
A. Interest on the full purchase price
B. Interest only on the deposit
C. Nothing, as the buyer must complete regardless
D. A full refund with interest and compensation
A. Interest on the full purchase price
Explanation: Under SCS, if the seller fails to complete on time, they owe interest on the full purchase price, even though they haven’t received it yet. This is not the case under SCPC.
A buyer has paid only a 5 percent deposit and then fails to complete on time. The seller serves a valid notice to complete. What must the buyer do immediately?
A. Leave the property
B. Pay interest on the full purchase price
C. Top up the deposit to 10 percent
D. Request an extension
C. Top up the deposit to 10 percent
Explanation: Under SCS 6.8.4, a buyer who has paid less than 10 percent must make up the shortfall without delay once a notice to complete is served.
The buyer has failed to complete. A valid notice to complete was served, and 10 working days have passed. What can the seller now do?
A. Rescind the contract, forfeit the deposit and claim damages
B. Extend the completion deadline automatically
C. File for bankruptcy against the buyer
D. Request the buyer to resubmit their mortgage application
A. Rescind the contract, forfeit the deposit and claim damages
Explanation: If the defaulting party fails to complete within the 10 working days following a valid notice to complete, the non-defaulting party may rescind the contract and pursue remedies including forfeiting the deposit and damages.
Completion is due at 2 pm. The seller’s solicitor has received the purchase money at 2:20 pm. Can the seller serve a notice to complete?
A. No, they must wait until the next day
B. Yes, immediately after 2 pm
C. Only if the deposit is less than 10 percent
D. Only with the buyer’s consent
B. Yes, immediately after 2 pm
Explanation: Under SCS, the time for completion is 2 pm unless otherwise agreed. A party may serve notice to complete once that time has passed and the other has not fulfilled their obligations.
A seller fails to complete after notice to complete is served. What remedies are available to the buyer?
A. The buyer may rescind and claim specific performance or damages
B. The buyer must extend time for completion
C. The buyer automatically acquires the title
D. The buyer forfeits their deposit
A. The buyer may rescind and claim specific performance or damages
Explanation: A buyer can rescind the contract, recover their deposit with interest, and pursue damages. In some cases, they may also seek specific performance (a court order to compel completion).
Under the Standard Commercial Property Conditions (SCPC), if the seller delays completion, are they liable to pay interest to the buyer?
A. Yes, just like under the Standard Conditions of Sale (SCS)
B. Only if there is an express clause to that effect
C. No, the SCPC does not provide for interest to be payable by the seller
D. Yes, but only on half the purchase price
C. No, the SCPC does not provide for interest to be payable by the seller
Explanation: Unlike SCS, under the SCPC the seller is not liable for interest on late completion. This is a frequently tested difference between SCS and SCPC.
On the contractual completion date, the buyer’s solicitor sends the completion funds to the seller but includes an instruction not to release the money. Has the buyer completed?
A. No, because funds must be unconditionally released
B. Yes, because the funds were sent
C. Yes, because the buyer’s intent is not relevant
D. No, because the seller has to acknowledge receipt in writing
A. No, because funds must be unconditionally released
Explanation: The buyer must unconditionally authorise release of the funds. If instructions are given to hold them back, completion has not occurred.
Contracts were exchanged for £300,000 with a 5% deposit. The buyer fails to complete on time. What must the buyer do immediately if served with a notice to complete?
A. Pay contractual damages
B. Apply for an injunction to stop the sale
C. Pay interest on the whole purchase price
D. Top up the deposit to 10 percent
D. Top up the deposit to 10 percent
Explanation: If the buyer has only paid a partial deposit, they must immediately top it up to the full 10 percent once a notice to complete is served.
Once a notice to complete is served, can it be withdrawn unilaterally by the party who served it?
A. Yes, at any time before the ten-day period ends
B. Yes, if the serving party gives 24 hours’ notice
C. No, it is automatically irrevocable
D. No, it can only be withdrawn by mutual agreement
D. No, it can only be withdrawn by mutual agreement
Explanation: A notice to complete is binding on both parties and can only be withdrawn if both sides agree.
The buyer served a notice to complete. The seller failed to complete within ten working days. What remedy is now available to the buyer?
A. The buyer may rescind and seek specific performance
B. The buyer may deduct the deposit from the purchase price
C. The buyer may release the deposit back to the seller
D. The buyer may file a caveat against the seller’s property
A. The buyer may rescind and seek specific performance
Explanation: If the seller fails to complete after a valid notice to complete, the buyer may rescind, demand the deposit back, claim damages, or even seek specific performance to force the sale.
