(Prop. Law & Practice p. 310-316)

NON-DISCLOSED INCUMBRANCE REVEALED

Should it have been disclosed?	If it was latent and not clearly observable on personal inspection, then yes it should have The seller has a duty of disclosure (SCPC 9.1.2) So, the buyer will have a cause of action for breach of this element of the contract T&F NOTE buyer has no rightof action against sellerin relation to an incumbrance under the implied covenants for title, provided thattheincumbrance has been properly disclosed in the contract.
Was the contract made by deed?	If yes, then LA 1980 gives you 12 years (limitation Period to bring a claim)from date of breach If not, then LA 1980 gives you 6 years (limitation Period to bring a claim)from date of breach Check the contract itself for any other limitation
What remedies are available for breach of the contract? P310	Damages (SCPC 9.1.2) P310 Buyer is only entitled to damages if there’s a material difference in the value of the land If B defaults and S makes loss on a resale, then S can claim damages If B defaults and S makes a profit on a resale, then this must be taken into account Damages will be awarded under the Hadley v Baxendale principle (losses naturally flowing from the breach) and any reasonably foreseeable consequential loss that was foreseeable when the contract was made NOT claim for: mental distress or pre-contract expenditure Rescission (SCPC 9.2) P312 If the value is substantially reduced, rescission is available If error resulted from fraud, misrep. or recklessness, rescission is always available It is the restoration of the parties to their original position by undoing the contract and paying compensation to balance their positions Specific Performance of the contract It is an equitable remedy and therefore entirely at the discretion of the court however, orders for Specific Performance are not uncommon since no two pieces of land are identical and damages may not be therefore adequate or appropriate compensation for breach Remedy expressly contained in the Contract The remedy provided in the contract may be recession, damages or some other remedy.
Quantum	Quantum = contract price less market price at the date of the breach plus actual financial loss suffered as a result of the breach
Mitigation	Claimant must show that he has made reasonable steps to mitigate his loss
Credit	Must be given for compensation paid under 9.4 or for a deposit forfeited
Misrep.	T&F NOTE A buyer may have a cause of action against the seller for negligent misrepresentation under the Misrepresentation Act 1967. The action would be for rescission of the contract and damages. But, if contract incorporated SCPCs, SCPC 9.1 limits the remedies available to the buyer.

THREATEN NOT TO COMPLETE

While this isn’t a breach of contract, it would be prudent for the other party to apply to court for a Specific Performance Order (“SPO”) requiring the other party to complete their obligations under the contract (Hasham)

Note that SPO will not be awarded where: damages in lieu would be adequate (s.50 SCA); a third party has acquired an interest in the property; the seller cannot make good title to sell

Late Completion

(SCPC 9.3) P310 Any delay will result in a breach of contract entitling the injured party to compensation for the period between completion date and actual completion and any damages for any loss suffered as a result of the delay (Raineri v Miles (1981)) but will not entitle him to rescind the contract (SCPC 9.3.1), unless time was of the essence. After notice to complete has been served (SCPC 8.8.1) party at fault will have 10 working days to complete (SCPC 8.8.2). If party at fault continues to delay completion even after Notice (notice makes “time of the essence” a condition of the contract binding on both parties) the innocent party may rescind the contract (SCPC 9.5 (for buyer)) and (SCPC 9.6 (for seller)) and damages etc (Hadley v Baxendale (1854)) may be awarded to the innocent party. Apply to the facts: are there any other buyers around to sell to? What condition is the property market in? See diagram (based on SCPC not SC):

Calculating Compensation: at the Contract Rate (1.1.1(e))
Purchase price	1,000,000
Less deposit	(100,000)
Balance due	900,000	Check the contract to see what was the agreed interest rate, otherwise apply 4.5% (Law Society’s rate) under SCPC 1.1.1(e)
Interest = 900,000 x 8.5% 365 (for daily rate)	209.59
Interest = 900,000 x 8.5% 365 (for daily rate)	209.59	Daily rate for this e.g. 209.59 client may wish to pay it if he has a better purchase alternative and can afford to pay the compensation and damages for late completion.
Late Completion steps from SCPC Standard Commercial Property Conditions
1. Is there going to be late completion?			2. Serve notice to complete	3. Failure to comply with the notice to complete.
SCPC 9.3 Late Completion 9.3.1 If Buyer defaults in performing its obligations under the contract and completion is delayed, buyer is to pay compensation to the seller. 9.3.2 Compensation is calculated at the contract rate on the purchase price (less any deposit paid) for the period between completion date and actual completion, but ignoring any period during which the seller was in default. 9.3.3 Any claim by the seller for loss resulting from delay completion is to be reduced by any compensation paid under this contract. 9.3.4 Where the sale is not with vacant possession of the whole property and completion is delayed, the seller may give notice to the buyer before the date of actual completion, that it will take the net income form the property until completion as well as compensation under condition 9.3.1 apart from 9.3.2 (compensation) the innocent party may also get damages** for breach of contract (e.g. of damages: having to pay mortgage fees, interests)			8.8 Notice to Complete 8.8.1 At any time on or after completion date, a party who is ready able and willing to complete may give the other a notice to complete. 8.8.2 The parties are to complete the contract within ten working days of giving a notice to complete, excluding the day on which the notice is given. For this purpose, time is of the essence of the contract.	9.5 Buyer’s failure to comply with notice to complete 9.5.1 If the buyer fails to complete in accordance with a notice to complete, the following terms apply. 9.5.2 The seller may rescind the contract, and if it does so: a) it may (i) Forfeit and keep any deposit and accrued interest on the deposit. (ii) Re-sell the...

#10281 - Breach Of Contract Between Exchange And Completion - Property Law and Practice

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