The Missing Director's Signature and the Notice to Complete

Under the Standard Conditions, the completion date is not usually of the essence unless a notice to complete makes it so. Rowan can serve a notice to complete because Kestrel failed to complete on the contractual date and the failure is not due to Rowan's default. The notice must be in writing, specify a new completion date, require completion by that date, and state that time is of the essence. Under the Standard Conditions the period is normally 10 working days, but check the edition; the notice should not be served before the contractual completion date has passed. Once served, if Kestrel still fails, Rowan may rescind the contract, recover the £240,000 deposit, and claim damages for breach. If Rowan subsequently fails to complete, Kestrel could rescind and forfeit the deposit. The notice should be served on Kestrel's solicitor and copied to the lender. Because Rowan's lease ends in 10 days, a 10-working-day notice is too long; Rowan should negotiate a shorter period or seek specific performance immediately, but a shorter period must still be reasonable.

Rowan's primary remedy is specific performance, because the warehouse is unique and damages may not be adequate. The court can order Kestrel to execute a valid transfer; if the articles require two signatures, the court can appoint a person to execute or dispense with compliance. Alternatively, Rowan can rescind and recover the deposit, and claim damages. Damages for delay would include additional rent or alternative accommodation, storage, removal costs, financing costs, and loss of profits if within the parties' contemplation. The £5,000 offered is likely inadequate. If Kestrel's misrepresentation about its ability to complete induced the contract, Rowan may also claim rescission and damages in deceit or under the Misrepresentation Act 1967. Rowan should not rescind without considering whether it wants the property; rescission may lose specific performance. A letter before action should demand completion within a fixed period and reserve all rights. The deposit is held by the seller's solicitor as stakeholder, so Rowan has a proprietary claim if Kestrel becomes insolvent.

Special condition: 'Completion is conditional on the Seller delivering a transfer executed in accordance with its articles of association and s.44 Companies Act 2006. Time is of the essence. If the Seller fails to complete on the Completion Date, the Buyer may serve a notice requiring completion within five working days, and the Seller shall pay the Buyer £2,000 per day for each day of delay as liquidated damages. If the Seller fails to comply, the Buyer may rescind, recover the deposit, and claim damages, or seek specific performance. The Seller shall procure the execution of the transfer by two authorised signatories and shall provide a board minute and certificate of incumbency. A sum of £50,000 shall be retained from the purchase price until registration of the transfer.' Check that the daily sum is a genuine estimate of loss, not a penalty; otherwise it may be unenforceable. The condition should also give the buyer the right to complete on notice despite the seller's default.