Exchange of Contracts Flashcards
Who prepares and drafts the contract?
The seller’s solicitor
What is the contract bundle?
Standard form contract, official copies
What happens after exchange?
The parties are committed to the transaction
What is buyer’s checklist before exchange? (9)
- Check all searches and enquiries
- Check buyer has received survey
- Advise buyer that insurance must be in place
- Check funds cleared from buyer
- Ensure lender’s solicitor (in commercial) has approved draft certificate of title
- Ensure full report on title
- Send contract to buyer for signature
- Obtain instructions on proposed completion
- Obtain authority of buyer to exchange contracts
What is seller’s checklist before exchange?
- Obtain redemption figure from lender
- Reply to outstanding additional enquiries
- Prepare engrossments of contract
- Obtain seller’s authority to exchange contracts
What is Law Society Formula B?
Exchange by telephone call
How is Formula B handled?
Solicitors will go through contract on phone ensuring it is identical – agree date and time of exchange
What does Law Society Formula B impose on solicitors following exchange?
Undertakings on the following:
- Hold signed contract to other solicitor’s order
- To post signed contract by first class post or DX
- To send deposit in form of payment specified by contract
What is Formula A?
Same solicitors hold both contracts – undertake to send to both
What is Formula C?
More so for chain transactions – money from one property used to buy another
What must solicitor prepare after exchange?
A memorandum of exchange
What is included in memorandum of exchange?
Key contract terms for the file
Who does risk pass to on exchange?
The buyer
