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Joshua
Joshua, Lawyer
Category: Law
Satisfied Customers: 26070
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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The Church Commissioners accepted my offer to purchase a house

Resolved Question:

The Church Commissioners accepted my offer to purchase a house from them and issued me with a contract. Because it was the church who were selling I did not ask for a lock out while I raised the funds by selling shares and borrowing against my own house.

Just before contracts were due to be exchanged the solicitors acting for the church reneged on their agreement and announced by email that having received a higher offer they wanted "best and final" offers by 1.00pm that day. I did not read the email until after the closing time for the bid. The Estate Agent acting for the Church knew that I was on holiday and had been told that I would only read my emails in the morning and the evening.

I have heard of Promissory Estoppel where one can enforce damages against the Church on the grounds that they should be trustworthy and abide by their agreement without the need for a lock out agreement. Surely one would not expect the Church to "gazump".

By reneging on their agreement to sell to me they obtained an additional £200,000. I am claiming only £7,300 of actual mcosts incurred.

Can I try the Small Claims Court?
Submitted: 3 years ago.
Category: Law
Expert:  Joshua replied 3 years ago.

Joshua :

Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.

Joshua :

May I ask if any initial correspondence include the phrase "subject to contract" please?

Customer:

Yes, my offer was made "subject to Contract"

Joshua :

Thanks. Unfortunately the church commissioners have something of a reputation in the property world as not to be underestimated. The starting point is if the parties have clearly agreed to an agreement and that has been reduced to writing then the fact of a signature or lack thereof is irrelevant. A verbal agreement is in fact sufficient to create a contract. However there is a very significant caveat in this respect.

Joshua :

However if you or the seller used a "subject to contract" formula in any initial correspondence the position changes. The formula comes into force once either party expresses an offer or acceptance of an offer as being ‘subject to contract’ and will remain in force even if following correspondence does not bear the same formulation until it is specifically brought to an end. Longman v Viscount Chelsea the Court made clear that this means that the “relationship does not become binding until there is a signed contract by both parties and until this happens either party is free to withdraw without any penalty whatsoever.

Joshua :

The formula can be brought to an end by either of you agreeing that the formula should no longer apply or one or more of the parties performing an action which sets the formula to one side. The most obvious of these is provision of a deposit under the contract and a completion date being agreed.

Joshua :

The difficulty here will be because the subject to contract formula has been invoked until contracts are exchanged or at least a deposit changes hands and a completion date agreed which I assume from what you say did not happen it is possible for the seller and in deed you to withdraw at any time. Estoppel can be used in certain situations, however it is not possible to use when a deal is made subject to contract I fear.

Joshua :

Unfortunately in these circumstances unless you can show that the subject to contract formula was agreed to be set aside, the church will have a right to walk away at any point up to exchange of contracts without penalty where neither party is liable for the others costs.

Joshua :

I am very sorry I am not able provide a more positive assessment. Is there anything above I can clarify for you?

Customer:

Sadly, you are correct and I thank you for your help even if the answer is not the one I wanted.

Joshua :

I am very sorry that there is so little above that is positive. The Church Commissioners are a fearsome adversary - they drive hard bargains and have significant resources to fall back on.

Customer:

I have written to the Archdeacon who is responsible for the church property matters to tell him what has happened in the hope that he will cover my modest costs (circa £7,000) from the enormous price that the church obtained over that which they accepted from me (£200,000).

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