Land Contracts Flashcards
How can agreed terms be incorporated into the land contract?
either by being set out in the document or by referring to some other document.
Does the same document need to be signed by both parties?
The terms may either b contained in one document, which is signed by both parties, or if the contracts are to be exchanged, in two documents provided they are identical.
Is it possible for the land contract to be electronically signed?
It is possible that contracts may be signed by electronic signature pursuant to the Electronic Communications Act 2000 if the parties agree a procedure for that, but it is not the current practice.
Can a land contract be varied?
Whenever a material term in a land contract is varied that variation must comply with the above requirements. A `material term’ would include the completion date.
What is the proprietary effect of the contract?
The effect of a binding land contract is to pass an equitable interest in the land to the buyer called an estate contract.
A contract to create or transfer a legal property right will create a proprietary right in equity if the remedy of specific performance is available i.e. the claimant must have clean hands.
Are estate contracts enforceable against a third party?
As an estate contract is a proprietary right in land it is capable of binding and being specifically enforceable against third parties.
As an estate contract is a proprietary right in land, it is capable of being enforced against third parties. In order to be binding on third party purchasers, it must be protected (i.e. registration).
If the interest holder fails to protect the estate contract and the third party is a donee (someone who is gifted or inherits the land) they will be bound by a property created estate contract, regardless of registration.
What are the different types of land contracts?
Sale contract
Agreement for lease or contract for lease
An option agreement
A right of pre-emption
Failed legal interests
What is an option agreement?
A type of estate contract that gives another party a right, during the option period, to serve notice that they wish to buy the land. If notice is served during the option period, the seller must sell the land to the buyer. However, the buyer is not obliged to exercise the option.
What is a right of pre-emption?
Type of estate contract that gives another party a right of first refusal in the event the land owner decides to sell their land. This means that the land owner cannot sell the land without first offering it to the party holding the right. There is no obligation to sell, and there is no ability for the party who has the benefit of the right to require the land be sold to them.
What remedies are available for breach of land contract?
Damages
Specific performance
Injunction
What is the usual measure of damages and when are they available?
This is a common law remedy and therefore available as of right rather than at the court’s discretion.
The usual measure of damages is the loss which the claimant has suffered as a result of the breach e.g. legal and surveyor’s fees, including the loss of the bargain.
When will specific performance and an injunction be available?
As they are both equitable remedies, it means they are not available `as a right’ and are entirely at the discretion of the court.
Equitable remedies will also apply, which means the court will have regard to the behaviour of both parties in determining whether to make an order or grant an injunction. If the buyer delays in requesting the remedy or itself has not behaved honourably then the court pay well refuse to make an order of specific performance or grant an injunction.
