Law Report: Variation of land sale contract was invalid

McCausland and another v Duncan Lawrie Ltd and another; Court of Appeal (Lord Justice Neill, Lord Justice Morritt and Mr Justice Tucker) 6 June 1996

The strict requirements of section 2 of the Law of Property (Miscellaneous Provisions) Act 1989, that all the terms of a contract for the sale or other disposition of an interest in land had to be incorporated in a signed document, applied not just to the contract itself, but also to any variation later agreed between the parties.

The Court of Appeal allowed an appeal by the plaintiffs, Piers Conolly McCausland and Elisabeth Maria Rionagh McCausland, against the decision of Mr Justice Knox, on 7 July 1995, striking out their statement of claim against the respondents, Duncan Lawrie Ltd, a bank, and SIS Securities Ltd, a property company. The claim was for specific performance of a contract dated 26 January 1995, whereby SIS agreed to sell the property known as 1 Beechmore Road, London SW11, to the plaintiffs for pounds 210,000, and for damages.

David Neuberger QC and M. Geldart (H.C.L. Hanne & Co) for the appellants; Philip Shepherd (Swepstone Walsh) for the respondents.

Lord Justice Neill said the sale agreement provided for payment of a deposit of pounds 1,000, and payment of the balance by 2.30pm on the completion date, which was stated to be 26 March 1995. It also provided that at any time on or after the completion date a party who was ready, able and willing to complete might give the other notice to complete. By special condition 6, if the buyers did not complete on the completion date, the balance of the full 10 per cent deposit would become payable.

A few days after the contract was signed the respondents' solicitor realised that 26 March was a Sunday. On 3 February he wrote to the plaintiffs' solicitors suggesting completion be rearranged for the preceding Friday 24 March. The plaintiffs' solicitors wrote back confirming this was acceptable.

The plaintiffs were unable to pay the balance of the purchase price on 24 March and the respondents' solicitors sent them a completion notice demanding completion by 7 April or payment of the pounds 20,000 balance of the deposit in accordance with special condition 6. The plaintiffs were unable to complete by then and paid the balance of the deposit while reserving the right to recover that sum if it transpired that the respondents had not been entitled to serve the completion notice on 24 March.

The plaintiffs claimed there had been no valid variation of the contractual completion date of 26 March, and accordingly no valid rescission by the respondents of the contract of sale, because the variation did not comply with section 2 of the 1989 Act. This provided:

1) A contract for the sale or other disposition of an interest in land can only be made in writing and only by incorporating all the terms which the parties have expressly agreed in one document or, where contracts are exchanged, in each.

2) The terms may be incorporated in a document either by being set out in it or by reference to some other document.

The respondents accepted that section 2 contained strict provisions relating to the formation of a contract for the sale or other disposition of an interest in land, but submitted that section 2 had not altered the law on oral variations of a contract. It had always been the law that oral variations of written contracts were capable of proof. The manner of proof was a rule of evidence. There was nothing in section 2 to show that the variation of a contract had to comply with the formalities prescribed in the statute.

His Lordship felt bound to reject those arguments. It seemed clear that Parliament intended to introduce new and strict requirements as to the formalities to be observed for the creation of a valid disposition of an interest in land. Under section 2 all the terms of the contract had to be incorporated in the signed document. The formalities prescribed by section 2 had to be applied to the contract as varied. This was not a case where the agreement between the parties was concluded by an exchange of contracts. The only document signed by both parties was the contract dated 26 January 1995.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs People

Ashdown Group: HR Manager - West London - £50,000

£40000 - £50000 per annum + bonus: Ashdown Group: HR Manager - West London - £...

Recruitment Genius: Recruitment & HR Administrator

£17000 - £18000 per annum: Recruitment Genius: This is an exciting opportunity...

Guru Careers: HR Manager / HR Business Partner

£55 - 65k (DOE) + Benefits: Guru Careers: A HR Manager / HR Business Partner i...

Recruitment Genius: Senior HR Assistant

£23000 - £25000 per annum: Recruitment Genius: The Company's vision is to be t...

Day In a Page

The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'
Compton Cricket Club

Compton Cricket Club

Portraits of LA cricketers from notorious suburb to be displayed in London
London now the global money-laundering centre for the drug trade, says crime expert

Wlecome to London, drug money-laundering centre for the world

'Mexico is its heart and London is its head'
The Buddhist temple minutes from Centre Court that helps a winner keep on winning

The Buddhist temple minutes from Centre Court

It helps a winner keep on winning
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'