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Incomplete Sale of Land

December 15, 2016

We had a new matter this week involving a contract for the sale of land.

Our client is a company that owns a villa. The directors are a husband and wife. The husband thought the wife wished to sell, so he put the house on the market, an offer was made, and he signed the acceptance on behalf of the company.

The buyer then went off and obtained finance and thought they had an unconditional contract.

The wife, however, decided that she did not wish to sell.

The buyer then sued the company seeking specific performance.

We are of the view that the contract for the sale of land has not been signed by the company, because two directors, or a director and a secretary of the company need to sign if there are two directors.

The opposition’s solicitor, known for being rather aggressive, has now threatened summary judgment. Our letter told them there is no contract at all, so there is no cause of action at all, and if they discontinue by Monday, we won’t seek costs. We’ve sought a response by Friday.

The husband is exposed because it is arguable that he held himself out as having authority to sign for the company, so we have sought a sworn valuation to see what the exposure might be, but there is no cause of action against the company.

For assistance resolving commercial disputes, see Michael Paterson & Associates.

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