Contract for the sale of land must be signed by both parties (LP(MP)A 1989 s.2)
Owen agreed to sell a field in Shropshire, England, to Priya for £85,000. Owen's solicitor prepared a single document setting out every term the parties had agreed. Owen signed it and sent it to Priya, who read it, telephoned Owen to say she was happy with it, but never signed it or any other copy. No deposit has been paid and neither party has acted on the arrangement. Owen now has a better offer and wants to withdraw.
Which of the following best describes the legal position?
Choose one answer to see the reasoning.
Worked answer
Correct answer A: There is no contract, because the document incorporating the terms was not signed by or on behalf of Priya.
THE RULE TO REMEMBER
A contract for the sale of an interest in land can only be made in writing, incorporating all expressly agreed terms, signed by or on behalf of each party.
Contract for the sale of land must be signed by both parties (LP(MP)A 1989 s.2)
Under s.2(1) of the Law of Property (Miscellaneous Provisions) Act 1989, a contract for the sale or other disposition of an interest in land can only be made in writing, incorporating all the expressly agreed terms in one document (or in each part where contracts are exchanged). Section 2(3) adds that the document must be signed by or on behalf of each party to the contract. Owen's document contains all the terms, but only Owen signed it. Priya's telephone call cannot supply the missing signature. Because s.2 states the conditions under which a contract "can only be made", the result is not an unenforceable contract but no contract at all, so Owen is free to withdraw. Nothing in the facts suggests a resulting or constructive trust or estoppel, which s.2(5) preserves: no money was paid and neither party relied on the arrangement.
Why B is wrong: This reflects the old s.40 LPA 1925 approach; s.2 requires signature by each party for any contract to exist.
Why C is wrong: Incorporating all terms in one document satisfies s.2(1) only; s.2(3) also requires both parties' signatures.
Why D is wrong: An oral acceptance cannot create a contract for the sale of land; the writing and signature requirements are mandatory.
Why E is wrong: Payment of a deposit is not a statutory condition of a land contract and cannot cure a missing signature.
A little more practice done.
Related questions
Oral short lease at a market rent creates a legal lease (LPA 1925 s.54(2))
Which of the following best describes the interest Kwame holds?
Oral declaration of trust of land: LPA 1925 s.53(1)(b)
Can Beatrix enforce the trust against Owen?
Oral direction to trustees to hold for another: s.53(1)(c) LPA 1925
Who is beneficially entitled to the shares?
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