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Anyone who has bought or sold residential property will have encountered a conveyancing contract. Before we turn our attention to conveyancing contracts specifically, let’s consider contracts in general.
What is a contract?
A contract is an agreement between two or more parties that creates legal rights and obligations that bind those parties. There are four elements that are essential to creating a binding contract:
- An offer.
- Acceptance of that offer.
- Consideration, which is the price paid in exchange for the fulfilment of a promise.
- An intention to create legal relations.
An offer must be on specific terms. A statement to you that “I offer to sell you a house” is not a valid offer, even if you purport to accept it, as neither the specific house nor the price is mentioned.
Does a contract have to be in writing?
While most types of contract do not have to be in writing to be binding, the exception is contracts for the sale of land. Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 requires contracts for the sale of land to be in writing. In addition, there is a requirement that the contract must incorporate all of the terms of the contract in one document. The document must also be signed by all parties.
Standard Conditions of Sale
In almost every case, you will find that your conveyancing contract is in a standard form. The document’s first page generally contains the particulars – information such as the parties’ details, price, deposit, and completion date. This is also the page you will sign.
The terms incorporated into the contract are inevitably the ‘standard conditions of sale’ produced by the Law Society, that are currently in their 5th edition. Although there is no requirement for a conveyancing solicitor to use the standard conditions of sale, in practice it’s very unusual to come across a contract that isn’t subject to them. They cover pretty much every foreseeable eventuality arising from a property transaction. Two common examples are:
- What happens in the event of late completion?
- Who is responsible for insuring the property if the buyer wishes to take up occupation before completion?