Related news and articles
Related news and articles
There are occasions when parties will have exchanged contracts to purchase a property, but one of the parties will fail to complete on the contractual completion date. The Standard Commercial Property Conditions will usually have been incorporated into the contract meaning that the other party can then serve a notice to complete, requiring the defaulting party to complete within 10 working days. However the party serving the notice must be ‘ready, able and willing’ to complete itself. The High Court has found in the case of Cantt Pak Ltd v Pak Southern China Property Investment Ltd that the seller need only be ready, able and willing at the point that it serves a notice to complete. It does not have to remain so throughout the notice period.
The case concerned an industrial site in Manchester, part of which was occupied by various third parties. The sale was to be with vacant possession. The buyer failed to complete on the contractual completion date and the seller served a notice to complete. The buyer did not complete by the deadline but applied to register unilateral notices on the seller’s title after receiving notice of the seller’s rescission of the contract, to which the seller objected.
One of the questions the court considered was whether the seller was in fact ‘ready, able and willing’. A party meets this requirement if it ready, able and willing to complete but for the default of the other party. The buyer argued that this was not the case with the seller, as it was not able to provide vacant possession. However, the court did not agree with the buyer’s argument, and found that the seller need only be in a position to secure vacant possession on or before the completion deadline. This was met as the judge considered the third party occupiers would have vacated on a few days’ notice.
Secondly, the buyer argued that because the seller had not provided vacant possession by the completion deadline, it was no longer obliged to complete. The seller’s counter-argument was that because the buyer had failed to tender payment by the deadline, the seller was still entitled to rescind the contract, even if it had breached the vacant possession provision. The judge found that the buyer had chosen to keep the contract alive and it remained bound to complete.
This case makes it clear that the position as to whether a party is ready, able and willing is judged at the time that the notice is served only. It also demonstrates that a party will remain bound by a contract if it chooses not to terminate after a repudiatory breach by the other party.
Getting the terms of a property sale contract correct and having clear advice on what those terms mean is extremely important in dealing with any commercial property transaction. Here at Myerson, any one of our experienced team of commercial property solicitors would be happy to speak to you about your plans for selling or buying a property. Please give us a call on 0161 941 4000 or email us on firstname.lastname@example.org.