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Elderly Property Seller Has Viable Defence to Breach of Contract Claim

Once you have exchanged contracts for the sale of a property, the general rule is that you are legally obliged to proceed to completion – but there are exceptions. A High Court case on point concerned an elderly seller’s claim that a purchaser falsely represented to her that it was a cash buyer.

The seller, aged 89, received an £860,000 offer to buy her home, but ultimately exchanged contracts with a property investment company for £840,000. After she refused to go through with the sale, the company sought an order requiring her to complete the transaction in accordance with the contract. It sought summary judgment against her on the basis that she had no viable defence to the claim.

After abandoning arguments that she had entered into the contract under duress or undue influence, the seller put forward a defence that she had relied on a false representation that the company was a cash buyer, in the sense that it would not require a loan or mortgage in order to complete the purchase.

The company disputed that any such representation had been made and relied on a standard clause in the contract which stated: ‘Neither party can rely on any representations made by the other, unless made in writing by the other or his conveyancer, but this does not exclude liability for fraud or recklessness.’

Rejecting the company’s application, however, the Court ruled that the seller had at least an arguable case that the clause did not extend to a misrepresentation that induced her to enter into the contract. It could also not be said that she had no real prospect of showing that the representation, if proved, was made recklessly.

Questions as to whether the representation was in fact made, and whether the seller relied upon it, were fact sensitive and unsuitable for resolution at a summary hearing. The same was true of an issue as to whether the clause was fair and reasonable. The Court’s decision to refuse summary judgment meant that the company would have to proceed with its claim to a full trial.

Published
22 August 2021
Last Updated
17 September 2021