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Max Lowry
Max Lowry, Advocate
Category: Law
Satisfied Customers: 1457
Experience:  LLB, 10 years post qualification experience
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Hi I am due to hand over a boat tomorrow which has been sold

Resolved Question:

Hi
I am due to hand over a boat tomorrow which has been sold through a broker.I only got a copy of the sales contract this evening and it is neither signed by the broker nor the purchaser.The name on the bill of sale also differs from the that on the contract.I have been advised that the funds are cleared and are being held in the brokers account and once I hand over the boat and paperwork the funds will be transferred to my account.

Needless to say I am a little concerned and would like to know if I am entitled to pull out of the contract at this stage.I have not signed any contract either, I just agreed a price.
Below is a clause from the sales contract. Please advise my position

16. Default by Vendor: If the vendor shall default in the execution of his part of the contract, the Purchaser shall be entitled to the return of the deposit within 14 17. Arbitration: All disputes that cannot be resolved between the Parties, in connection with this agreement shall be submitted to a single arbitrator to be appointed by MGM Boats.
Submitted: 3 years ago.
Category: Law
Expert:  Max Lowry replied 3 years ago.

Max Lowry :

Hi, welcome to the site. My name is XXXXX XXXXX I will help you with your question.

Max Lowry :

Have you indicated at all that you consider yourself to have entered into a contract for the sale of the boat?

Customer:

I accept that the broker was working on my behalf and I agreed to sell the boat but I am surprised that the contract is not signed

Max Lowry :

Okay, and you're under the impression that you need to sign the contract before the boat is sold (which would be normal?)?

Max Lowry :

I'm just checking you haven't done/agreed anything unusual?

Customer:

I have not been asked to sign a contract and there is nothing unusual in the deal

Max Lowry :

That's fine - thank you. Basically until you have a contract you can pull out of the discussions etc. at any time.

Max Lowry :

The clauses in the contract do not apply unless and until you agree they do apply, which usually happens only when you sign the agreement.

Max Lowry :

It's like buying a house, where you go through and do all the searches and things before you actually sign the contract. Only when the contract is signed and exchanged do you become liable to honour it and you can pull out at any time until then.

Customer:

Okay so given the fact that the sales contract emailed to me today outlines the purchase price but is unsigned and I acknowledge that I had agreed to sell the boat for the agreed price, I am in a position to not go ahead tomorrow with the handover.Any chance then that they can go for breach of contract?

Max Lowry :

If you've not communicated to them (or rather, your agent has not communicated to them - which he shouldn't have done without a signed agreement) that you have not formally agreed to the contract, then you should be able to walk away.

Max Lowry :

the issue is whether you have agreed yet or not and this depends on what has been said, but I would be very surprised if the position was anything other than requiring a signed contract to conclude a legal agreement between you.

Customer:

I am confused when you say "the issue is whether you have agreed yet or not"

Max Lowry :

Yes. You have either agreed a contract or you haven't.

Max Lowry :

If you have, then you dont strictly speaking need to sign anything. However, most people don't agree something orally when they have a contract in writing drawn up to sign, as this is the point of drawing up the contract.

Customer:

okay as stated I agreed to sell the boat the broker was to get the contract signed and returned to him, this has not been done as I mentioned earlier, all I have is a buyers name address" Germany" a listed purchase price,deposit amount paid and agreed by broker and agreed by purchaser both unsigned

Max Lowry :

Check with what the broker might have said tomorrow, but it seems to me like there is unlikely to be any binding contract at this time.

Max Lowry :

If the broker said "Dont worry, you dont need a signed contract, my client agrees it he said so just to me" then this means no signed contract is required. I doubt he would have done this, though.

Customer:

Be that as it may but when the broker told me he was getting a contract drawn up then I would have expected it to be signed by both of them

Max Lowry :

Yes, I thought this is how it would be and I think for that reason you will not have a contract at all and you would be free to walk away until there is a contract.

Customer:

okay I guess we could discuss this indefinitely so thanks for your advice

Max Lowry :

Yes, unless you know exactly what has been said, it's not possible to give a firm "yes there is a contract" or otherwise. I doubt there is though. Is there anything more I can help you with?

Customer:

So you would be of the opinion I am well within my own rights to not do a handover tomorrow?

Max Lowry :

Yes. That's right.

Customer:

What if he insists he signs the contract in my presence tomorrow

Max Lowry :

He can sign it - you would need to sign it too!?

Customer:

okay great that clarifies it!

Max Lowry :

No problem. Do you want me to answer anything more for you?

Customer:

my name is XXXXX XXXXX the contract it is the brokers and the purchasers

Max Lowry :

Then you need to check whether the broker has signed it and told the purchaser.

Customer:

the broker has not signed the copy he sent to me

Max Lowry :

Thats a good sign, but it's what he's done with the purchaser that's important.

Customer:

what do you mean?

Max Lowry :

To have a legal contract you have to tell the other person to it that you agree it. So the broker would have to tell (by signing the contract and sending it to) the purchaser.

Customer:

I see, well that does not seem to have happened

Max Lowry :

Then this is good and suggests there is no agreement so you would be able to walk away if that's the case.

Customer:

Lastly, even thought the funds are in the brokers account?

Max Lowry :

Yes, the funds are there in readiness for the contracts to be completed I expect.

Customer:

okay thanks a lot for your help

Max Lowry :

No problem. Would you mind rating the answer for me please before leaving. Thanks again!

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