The High Court has ruled that a minor failure was not enough to invalidate a contract between a property owner and a developer.
The developer had entered into an option agreement to buy the freehold of a development of approximately 80,000 square feet. The agreement stipulated that once the option was exercised, the developer would lease back a part of the property to the owner.
However, it then emerged that a small part of the proposed leaseback area could not be made available with vacant possession. The developer offered a nearby section of similar size.
This was not acceptable to the property owner who refused to complete the sale.
The developer took legal action to exercise the option and complete the contract. The High Court found in his favour.
The judge held that the small area that could not be made available with vacant possession was too insignificant to prevent the contract being completed. The owner could be compensated financially for the minor non-compliance.
Please contact us if you would like more information about contract issues.
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