Pre-Contract Matters, Contract Formation and Exchange
Before exchange
Pre-contract work is risk allocation. The seller prepares the protocol forms, replies to enquiries and the contract pack; the buyer investigates title, raises enquiries, obtains searches and arranges finance and survey. Candidates must know the Standard Conditions of Sale mechanics: the deposit (usually 10%), the completion date, the risk passing on exchange, and the effect of the seller's duty to disclose latent defects in title but not physical defects.
Formation and exchange
A contract for the sale of land must be in writing, incorporate all agreed terms, and be signed by or on behalf of each party. Exchange is the moment of binding obligation: risk passes, the deposit is held as stakeholder, and time becomes of the essence unless varied. Traps include the effect of a solicitor's authority to exchange, the difference between a lock-out agreement and an exclusivity agreement, and the consequences of conditional contracts and options. Watch the misrepresentation and misdescription rules - a buyer who exchanges with notice of a defect cannot later complain.
Rule of thumb
Ask three questions at exchange: is there a binding written contract signed by both parties; what is the deposit and who holds it; and what is the completion date and are time limits essential?
Worked example
A buyer exchanges without a survey and later discovers subsidence. Absent misrepresentation or a specific contractual warranty, the buyer bears the risk; the seller's disclosure duty covers title, not physical condition. Contrast a seller who fails to disclose a restrictive covenant of which they know: that is a title defect and may found a claim.