Law of Contract and Property Transactions
What this domain covers
Law of Contract and Property Transactions tests the formation, terms, and remedies of a land sale contract, and the steps from offer to completion: deposit, requisitions on title, completion, and closing adjustments.
Core rules
- A contract for the sale of land must be in writing and signed by the party to be charged (or an authorised agent). An oral agreement is generally unenforceable, though part performance may raise equitable arguments.
- Essential terms are parties, property, price, and sufficiently certain completion terms. Conditions such as “subject to finance” must have a deadline and a consequence.
- The deposit is security for performance, not merely a part payment. The contract should state who holds it, whether interest is payable, and what happens on default.
- The vendor must show a good title and answer requisitions. The purchaser must complete and pay the balance. Time may be of the essence if the contract says so.
- Remedies include damages, rescission, specific performance, and forfeiture of deposit. A vendor who defaults may have to repay the deposit and may be liable in damages.
- Closing costs such as stamp duty, transfer tax, registration fees, and legal fees should be allocated in the contract.
Worked example
A contract price is J$30,000,000 with a 10% deposit, J$3,000,000. The purchaser pays the deposit into the dealer’s trust account, then fails to complete. If the contract permits forfeiture, the vendor may retain the deposit and resell; the vendor must still account for any surplus after actual loss. If the vendor fails to complete, the purchaser can claim repayment of the deposit, damages, and possibly specific performance.
Traps
Using a verbal agreement; failing to make “subject to finance” enforceable; treating the deposit as automatically non-refundable; and ignoring the completion date.