The parties had exchanged a contract for a residential development land sale in Horsham, for £2.225 million. The contract contained a clause requiring the Seller to assign to the Buyer the copyright in various consultants’ plans, surveys and reports.
Notice to Complete served
The Buyer failed to complete on the Completion Date due to funding difficulties. The Completion Date had already been postponed and so the Sellers served a notice to complete requiring completion within 10 working days. The Seller terminated the contract and forfeited the deposit when the Buyer failed to comply.
The Buyer claimed that the Seller had breached the contract by terminating it because the Seller had not been poised for completion. The Seller had not properly complied with its obligations to assign the copyright and could only produce licences, which had also been dated incorrectly.
Was Seller genuinely able to complete?
The Court agreed with the Buyer that the Seller’s failure to comply with the obligation to assign copyright was not a mere administrative failure but a “matter of substance”. A server of a notice to complete must be ready to set in motion any necessary administrative arrangement to ensure completion within the time limit specified in the notice. The Seller in this case, was not. However, the Buyer had failed to raise this as a point of objection despite numerous opportunities. The Buyer was therefore taken to have acquiesced in the breach and the Court found for the Seller.
This case should be a reminder, for both landowners and developers, of the strict requirements to comply with condition precedents on completion, even where conditions appear to be administrative or trivial.
Disclaimer: While we do all that is possible in terms of ensuring its accuracy, this blog contains general information only. Nothing in these pages constitutes legal advice. You need to consult a suitably qualified lawyer from the firm on any specific legal problem or matter.
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