Land Contracts Flashcards
What is the first step in the conveyancing process?
A) Registration
B) Completion of the Deed
C) Exchange of Contracts
D) Payment of Stamp Duty
C) Exchange of Contracts
📌 Explanation: Exchange of contracts makes the transaction legally binding but does not transfer ownership.
Which legislation sets the formal requirements for a land contract?
A) Land Registration Act 2002
B) LP(MP)A 1989, s 2
C) Law of Property Act 1925
D) Trusts of Land and Appointment of Trustees Act 1996
B) LP(MP)A 1989, s 2
📌 Explanation: LP(MP)A 1989, s 2 requires land contracts to be in writing, contain all terms, and be signed by both parties.
Which contract allows a buyer the right (but not obligation) to buy land?
A) Sale contract
B) Agreement for lease
C) Option agreement
D) Right of pre-emption
C) Option agreement
📌 Explanation: An option agreement gives the buyer the choice to buy within a set period, but they are not required to do so.
Sophie agrees to buy a property. She signs a written contract, but before completion, she decides not to proceed. The seller sues for specific performance.
What will the court consider before granting the remedy?
A) Whether the contract complies with LP(MP)A 1989, s 2
B) Whether Sophie has clean hands
C) Whether damages would be an adequate remedy
D) All of the above
D) All of the above
📌 Explanation: The court must confirm contract validity, fairness, and the necessity of specific performance.
David wants to sell his land. He signs a right of pre-emption with Lucy. Later, David receives a better offer and sells to someone else without offering Lucy the chance to buy.
Can Lucy challenge the sale?
A) Yes, she has a proprietary interest in the land.
B) No, the agreement is only a personal right.
C) Yes, but only if she exercised the right before sale.
D) No, unless she already paid a deposit.
A) Yes, she has a proprietary interest in the land.
📌 Explanation: A right of pre-emption is a proprietary right if protected in the Land Registry (registered land) or Land Charges Register (unregistered land).
Which of the following is not required for a valid land contract under LP(MP)A 1989, s 2?
A) The contract must be in writing
B) The contract must be signed by both parties
C) The contract must be executed as a deed
D) The contract must include all expressly agreed terms
C) The contract must be executed as a deed
📌 Explanation: A deed is required to transfer legal title (LPA 1925, s 52), but a contract for land only needs to be in writing, signed, and contain all agreed terms (LP(MP)A 1989, s 2).
If a land contract does not comply with LP(MP)A 1989, s 2, what is its legal status?
A) It is void
B) It is automatically enforceable
C) It is binding on third parties
D) It is treated as an oral contract
A) It is void
📌 Explanation: Non-compliance with LP(MP)A 1989, s 2 renders a land contract void and unenforceable.
Which contractual arrangement grants a party the first right to buy land if the owner decides to sell?
A) Sale contract
B) Option agreement
C) Right of pre-emption
D) Agreement for lease
C) Right of pre-emption
📌 Explanation: A right of pre-emption gives a potential buyer the first opportunity to buy before the landowner sells to someone else.
Under what circumstances can a land contract be varied?
A) By oral agreement if both parties consent
B) Only if the variation complies with LP(MP)A 1989, s 2
C) Through verbal discussions with a solicitor present
D) By notifying the Land Registry
B) Only if the variation complies with LP(MP)A 1989, s 2
📌 Explanation: Any material variation to a land contract must also be in writing, contain all agreed terms, and be signed by both parties (McCausland v Duncan Lawrie Ltd, 1997).
Which key legal principle from Walsh v Lonsdale (1882) applies to land contracts?
A) “Equity will not assist a volunteer.”
B) “Equity regards as done that which ought to be done.”
C) “Once a contract is signed, it must be performed.”
D) “A contract for land must always be a deed.”
B) “Equity regards as done that which ought to be done.”
📌 Explanation: Walsh v Lonsdale confirmed that an equitable lease arises where a land contract complies with LP(MP)A 1989, s 2, even if a deed was not executed.
What is the primary remedy for breach of a land contract?
A) Specific performance
B) Injunction
C) Damages
D) Rescission
C) Damages
📌 Explanation: Damages are the default remedy for breach of contract, though specific performance may be available in equity.
When will a court refuse to grant specific performance of a land contract?
A) If the contract was signed electronically
B) If the claimant has “unclean hands”
C) If the contract was registered late
D) If the buyer has already paid a deposit
B) If the claimant has “unclean hands”
📌 Explanation: Equitable remedies like specific performance are denied if the claimant has acted unfairly (Coatsworth v Johnson, 1886).
Which method ensures an estate contract binds third-party purchasers in registered land?
A) Registering a caution
B) Entering a notice on the Land Register
C) Filing a statutory declaration
D) Having the contract witnessed by a solicitor
B) Entering a notice on the Land Register
📌 Explanation: A notice protects an estate contract in registered land and ensures it binds future buyers.
In unregistered land, how is an estate contract protected?
A) By lodging a Land Charge
B) By exchanging contracts
C) By notifying the freeholder
D) By registering a caution
A) By lodging a Land Charge
📌 Explanation: In unregistered land, estate contracts must be registered as a Land Charge to bind future purchasers.
Emma enters a valid land contract but later changes her mind. The seller demands she completes the purchase.
What is the most likely legal outcome?
A) Emma must complete the purchase due to specific performance
B) Emma can walk away without consequences
C) The seller must offer the land to another buyer
D) The contract is void because she has not taken possession
A) Emma must complete the purchase due to specific performance
📌 Explanation: Land is unique, and courts often grant specific performance to enforce valid land contracts.
Luke signs a contract to lease a property for 5 years, but fails to execute a deed. The landlord insists the lease is still valid.
What interest does Luke hold?
A) A legal lease
B) An equitable lease
C) A licence
D) No enforceable interest
B) An equitable lease
📌 Explanation: Under Walsh v Lonsdale, where a contract for a lease complies with LP(MP)A 1989, s 2, equity recognizes it as an equitable lease.
David signs a sale contract for land. Before completion, the seller gifts the land to his son, Josh, who claims ownership.
Can David still enforce the contract?
A) Yes, because a sale contract creates an estate contract, which binds Josh
B) No, because a gift is not a sale, so no legal issues arise
C) Yes, but only if the contract was registered before the gift
D) No, because Josh is an innocent third party
A) Yes, because a sale contract creates an estate contract, which binds Josh
📌 Explanation: Estate contracts bind third parties who take land as a gift, whether registered or not.
Sarah has a valid right of pre-emption over Peter’s land. Peter receives a high offer and sells to someone else without offering it to Sarah.
Can Sarah stop the sale?
A) Yes, if the right of pre-emption was properly registered
B) No, because it is only a personal right
C) Yes, but only if Sarah had previously paid a deposit
D) No, because Peter had no obligation to sell
A) Yes, if the right of pre-emption was properly registered
📌 Explanation: A right of pre-emption is a proprietary interest if registered, making it binding on subsequent buyers.
Tom enters into a contract to buy a freehold estate from Oliver. The contract complies with LP(MP)A 1989, s 2, and Tom pays a 10% deposit. Before completion, Oliver sells the land to Mia for a higher price, who registers her ownership.
Tom wants to enforce his contract. What are his legal options?
A) Tom can sue for specific performance because he has a proprietary interest in the land.
B) Tom has no remedy, as Mia is now the registered legal owner.
C) Tom can only sue Oliver for damages but cannot claim the land.
D) Tom can invalidate Mia’s ownership by claiming his contract overrides her registration.
C) Tom can only sue Oliver for damages but cannot claim the land.
📌 Explanation:
Tom’s contract creates an equitable interest (estate contract).
However, if Mia is a bona fide purchaser for value (bought the land in good faith and registered it properly), she takes the land free of Tom’s contract (LRA 2002).
Tom’s only remedy is damages against Oliver for breach of contract, but he cannot recover the land.
Sophia enters into a contract to buy land from Lucas, complying with LP(MP)A 1989, s 2. Before completion, Lucas mortgages the property to a bank. Later, Lucas refuses to complete the sale, and Sophia applies for specific performance. The bank claims that its mortgage has priority.
Who has the stronger legal claim, and why?
A) Sophia, because her land contract creates a proprietary right that binds the bank.
B) The bank, because a legal mortgage has priority over an equitable estate contract.
C) Lucas retains ownership, and neither Sophia nor the bank can enforce their rights.
D) Sophia and the bank must negotiate, as both have an equal claim.
B) The bank, because a legal mortgage has priority over an equitable estate contract.
📌 Explanation:
Sophia’s land contract creates only an equitable interest.
The bank’s mortgage is a legal interest (LPA 1925, s 1(2)(c)) and has priority over equitable interests unless Sophia registered a notice in the Land Registry before the mortgage.
Sophia may still sue Lucas for specific performance, but the bank’s legal mortgage would still take priority over her equitable interest.
