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Contracts & Deeds
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Lecture notes of 7 pages for the course Land Law at UOS (Contracts & Deeds)
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Lecture 6: Contracts, Deeds and Registration:Key issues on Formalities:
1) Statutory Interpretation of s2(1)
What contracts fall within s.2(1)
How is the contract formed?
What to do about missing terms?
What is a signature?
2) What is the Effect of a valid contract?
The Rule in Walsh v Londsdale AND
The position between Contract and Completion
3) 4 The Registration Gap:
The position between Completion i.e., the Deed of Transfer AND Registration
Stage [1]: Contracts for the Sale or Disposition of an Interest in Land:
Section 2(1) Law of Property (Miscellaneous Provisions) Act 1989:
“A contract for sale or other disposition in land [i.e., agreement to grant an
easement, lease, mortgage] can only be made in writing, and only incorporating
all the terms … in one document or, where contracts are exchange, in each.
NOTE variations which must also be in writing McCausland v Duncan Lawrie.
o Those provisions also apply to any subsequent variations of contracts
which must also be in writing and signed by the parties.
Key features for interpretation:
i. What is land?
ii. Written document[s]
iii. Signature
iv. All terms
Some exceptions to s.2[1]:
Auctions – expressly excluded as well as implied trusts
Contracts that govern how somebody is to sell land – example:
Pitt v PHH Asset Management:
o Lockout agreement = agreement between seller and proposed buyer, that the
seller would not offer the land to anyone else except the buyer for a given
period. Allows the buyer to have free access to buy the land for a limited time.
o Court: No necessity for that agreement, to comply with s.2[1].
Options = option agreement contrast to a lockout agreement. Is an agreement which a
seller makes to a purchaser that he will sell to purchaser, if purchaser serves a notice
on seller within a given period. [option agreement.] = find it in development where a
developer, is ear marking land for development, do not wish to buy at that time, but
do not want seller to sell to someone else.
After s.2[1] was passed – good deal of concern of how it affected option
arrangements.
o Spiro v Glencrown Properties Ltd – example:
Agreement granting the option must comply with s.2[1] but notice the
perspective buyer would serve to exercise the option did not need to be
incompliance with s.2[1].
Notice = usually in writing but does not have to contain all those other
requirements laid down in s.2[1].
, S.2[1] = generated a lot of caselaw
Boundary agreements = dispositive effect and purpose: [difficult, to resolve
arguments between neighbours as to where boundary is, this agreement is good to
resolve the dispute. Sometimes they involve the transfers of small areas of land, as the
boundary is agreed between parties.]
o Example: Yeates v Line
Even though they may have a disposing effect, do not have to comply
with s.2[1] where purpose of agreement is to no affect the transfer of
land, merely to resolve the dispute between parties.
Documentation isn’t clear = reasons why this boundary arises. Unclear
whether there is a disposing effect of a boundary effect.
Do not need to worry about boundary agreements complying with
s.2[1] unless there is a purpose of disposing land in resolving the
dispute.
Contracts of disposition and contracts for disposition:
o Example: Rollerteam Ltd v Riley
Only contracts for disposition that need to comply with s.2[1]
An agreement = effect of creating a trust, the disposition was creation
of trust as oppose to sale of land
Contract = argued it created that trust, the agreement affected the
disposition, nothing further that needed to be done to comply with
legal requirements of that disposition [in this case, declaration of trust]
Not concerned with whether agreements conducts disposition, where
we have an agreement that a disposition will happen in the future [what
we are concerned about] = most contracts for sale are for disposition,
therefore need to comply with s.2[1]
Executed contracts & executory contracts & the problem of agreed alterations/works:
Executed contract = one that has been performed, obligations of parties have been
performed. [contract for a sale of land, this happens at completion when seller
transfers the title deed transferring the legal ownership to purchaser and purchaser
performs the obligation to pay purchase price, contract is executed.
Executory contract
o Example: Tootal Clothing Ltd v Guinea Property Management Ltd
o Example: Keay v Morris Homes (West Midlands) Ltd
Once contract is executed the fact it did not comply with s.2[1] is
irrelevant the contract obligations have been performed and contract is
no longer important, it emerges with conveyance.
In contract, there were additional agreed terms regarding case of
Tootal carrying out of alterations which was subject matter of contract
and in relation to Keay to carry out building work promptly and pay
damages if not carried out promptly.
Not in relation to contract for sale of land, for agreed alterations and
work [arguments for both cases]
o Result for both cases:
Validity of the transfer of land which had been completed/executed
could not be disputed in those cases but non-compliance with s.2[1]
might prevent the enforcement of other parties agreement.
Those other parts of contract remained executory.
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