W4 Exchange of Contracts (The Property Contract)

Question 1

Which one of the following correctly describes section 2 of the Law of Property (Miscellaneous Provisions) Act 1989?

(a) The interest of a person in actual occupation will bind a purchase of the property.

(b) Implies certain covenants or obligations on the part of the seller.

(c) Contracts for the sale of land must be in writing and all the relevant terms must be incorporated into the contract.

Answer 1

Answer: C

This is the 2 of the requirements for a valid land contract. The contract will also need to be signed by, or on behalf of the parties to the contract.

Question 2

Which one of the following will be expressly incorporated into a contract for the sale of land?

(a) Law Society Conveyancing Protocol

(b) Standard Conditions (either the Standards Conditions of Sale or the Standard Commercial Property Conditions)

(c) Solicitor Undertakings

Answer 2

Answer: (b)

The standard conditions will always be incorporated into a contract for the sale of land. They contain conditions that are common to all transactions and it is easier to incorporate these by reference rather than write them all out again in the contract.

Question 3

Your client is selling his home and you are about to start drafting the contract. Which ONE of the following contracts would you choose as a precedent?

(a) A tailor made contract for sale incorporating the standard conditions of sale only.

(b) A standard form contract for sale incorporating the standard conditions of sale and pre-printed special conditions.

(c) A tailor made contract for sale incorporating the standard commercial property conditions and special conditions

(d) A standard form contract for sale incorporating the standard commercial property conditions only.

Answer 3

Answer: (b)

It is usual for the solicitor to prepare the standard form contract for sale incorporating the standard conditions for sale for residential transactions and the pre-printed special conditions will be at the back page of the standard form contract. A tailor made contract is used mostly in commercial property transactions, which this isn’t.

Question 4

Which of the following statements correctly describes the role of special conditions in a property contract?

(a) Special conditions may be used in commercial property contracts only to add to or amend the standard conditions

(b) Special conditions are incorporated into both residential and commercial transactions though there are different conditions depending upon the nature of the transaction. Both conditions are updated from time to time to take account any changes in law.

(c) Special conditions may be used in residential property contracts only to add to or amend the standard conditions

(d) Special conditions may be used in both residential and commercial property contracts to add to or amend the standard conditions

Answer 4

Answer: (d)

The Standard Conditions of Sale may be amended, excluded or supplemented by ‘special conditions’. This applies in respect of BOTH residential and commercial property transactions.

Though, in respect of residential transactions, if the seller’s solicitor is following the Law Society Conveyancing Protocol, special conditions may only be added if ‘absolutely necessary for the purposes of the transaction.’

Question 5

What does ‘SCS’ and ‘SCPC’ stand for ?

Answer 5

Answer:

SCS = Standard Conditions of Sale (these are incorporated into residential contracts)

SCPC = Standard Commercial Property Conditions (these are incorporated into most commercial property transactions)