3Mar

Developer must honour oral agreement to sell land to family

 A property developer has been told he must honour an oral agreement to sell some land to former friends despite falling out with them during the course of the transaction.

The case involved a developer who agreed in 2003 to sell a building plot and a meadow to some family friends for £200,000. The plot was £120,000 and the meadow £80,000.

 

In 2004, the family paid £66,000 towards the purchase price and in February 2005, the developer allowed them to start building a house on the plot while the conveyancing was being completed.

 

Contracts for the sale of the plot were exchanged in September 2005, the deposit being stated as £66,000. Special Condition 6 provided that the family entered into the contract solely on the basis of the terms now being written down, and “not in reliance on any warranty, statements, representation otherwise whether oral or implied”.

 

The family then paid the balance of the sum due for the plot, sold their existing house and then paid a further £80,000 for the meadow.

 

Shortly afterwards the parties fell out. The developer sent the family a cheque for £40,000 and informed them that they could only purchase half of the meadow.

 

The family took legal action to enforce the oral agreement but the developer argued that it was not binding.

 

The judge found in favour of the family. He held that by the time of the written contract, the parties had concluded what they all regarded as an immediately binding agreement, with the developer promising unconditionally to sell the meadow.

 

The family had acted on that promise to their detriment. Special Condition 6 did not negate the oral agreement and so they were entitled to the whole meadow.

 

For more information about this article or any aspect of our property services, please call James Whiteley or Reshma Patel on 020 8907 2000 or click here to email them and they will be delighted to help you (there is no charge for an initial telephone discussion).

 

Case featured:

Developer must honour oral agreement to sell land to family

[2016] EWCA Civ 1233
MATCHMOVE LTD v (1) MARK DOWDING (2) JANE CHURCH (2016)
CA (Civ Div) (Master of the Rolls, Lloyd Jones LJ, Arnold J) 07/12/2016

Share this Story

© Copyright 2016, All Rights Reserved