Relying on section 49 LPA 1925 – can you be rock solid?
This article was published in Property Week on 7 February 2017.
The payment of a deposit by a buyer to a seller under a contract for sale is a fundamental part of a transaction since it comprises the “consideration” that all first year law students learn is necessary – along with offer and acceptance – for the formation of a binding agreement between parties.
It ensures that a buyer “puts its money where its mouth is” and makes a payment to the seller as a guarantee of its performance. If the buyer fails to perform, then most contracts will provide that the contract is capable of rescission by the seller who can then also forfeit the deposit.
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Gavin Whitney, Partner, Fladgate LLP (gwhitney@fladgate.com)
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