Every property seller should be aware that, once contracts are exchanged, there is a strict obligation to complete the deal. One woman who failed to do that, following the death of her husband, was ordered by the High Court to go through with the sale and to pay substantial damages to buyers who were kept waiting for almost two years.

The woman and her husband had contracted to sell their home for £500,000 and the buyers had paid a £50,000 deposit. However, she failed to complete the transaction following her husband’s death. The buyers, whilst expressing sympathy for her, were not prepared to terminate the contract and launched proceedings.

In resisting their claim, the woman argued that the sale contract was unenforceable, having been tainted by illegality. It was submitted that the sale price had in fact been agreed at £510,000 but part of that sum had been paid in cash in order to bring the property into a lower bracket for Stamp Duty purposes.

In rejecting that allegation of fraud, however, the Court accepted that the buyers had paid sums in cash in order to secure the property and to ensure that it could not be bought by anyone else. The Court directed ‘specific performance’ (which is the name given when the court rectifies a breach of contract by requiring the party that commits the breach to complete the contract in accordance with its original terms) of the contract and in addition ordered the woman to pay damages to the buyers to reflect losses that they had suffered due to the delay in completion.

Arguments that the enforced sale of her home would cause the woman exceptional hardship were rejected.


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