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UKSolicitorJA
UKSolicitorJA, Solicitor
Category: Law
Satisfied Customers: 4312
Experience:  English solicitor with over 12 years experience
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,We were selling a large piece of land and we signed

Customer Question

,
We were selling a large piece of land and we signed a contract as sellers. The buyers have given notice they intend to terminate the agreement on the cost of remedial work on site.
The contract was signed in May 2014 and the Geotect Survey was completed in early July.
I believe the buyer has defaulted because they did not inform us in writing within 30 days as per Clause 5.2 whether the survey was acceptable or not. They continued in design and costing and were in contact with the area planning authorities until the 23rd of December when they informed us in writing they intended to terminate the agreement on the costs involved. We know the reason they wish to cancel and it is not costs.
I am sorry on the lack of more information but we are on an exclusivity and NDA agreement too.
I believe 5.2 Clause should have been carried out i.e. notified us in writing whether the survey was acceptable or not. The other Clauses would then come into force.
I would appreciate your opinion.
My best regards
John
*****@******.***
5. BUYER' S OBLIGATIONS RELATING TO GEOTECHNICAL REPORT
5. 1 Following the date of this Agreement and as soon as reasonably practicable
the Buyer shall at its own expense appoint a suitable consultant or
consultants to investigate possible ground contamination and geotechnical
issues and to prepare the Geotechnical Report and shall use reasonable
endeavours to procure the same is delivered as soon as practicable given
the nature of the Property and the issues to be addressed. The Buyer' s
instructions to the consultant shall include undertaking a Phase II intrusive
environmental investigation and may include such further tests
investigations and enquiries as may in the professional opinion of the
consultant be appropriate given the nature of the Property and the
Development.
5. 2 The Buyer shall within thirty Working Days of having received the
Geotechnical Report notify the Seller in writing whether or not in the
Buyer' s opinion such report satisfies the Environmental Condition giving
reasons opinion.
5. 3 The Buyer shall be at liberty following publication of a report which does
not satisfy the Environmental Condition at its own expense to commission
such further investigations and supplemental reports as it considers
desirable, acting reasonably, to address the matters which prevent the
Environmental Condition being satisfied and following receipt of such
supplemental report( s) shall be required to make a further determination
pursuant to clause 5. 2 above as to whether or not the Environmental
Condition is satisfied. This procedure may be repeated on more than one
occasion until either the Buyer gives notice that the Environmental
Condition has been satisfied or the Buyer gives notice that it is unable to
take any further steps to satisfy the Environmental Condition. If the latter
notice is given the Buyer may at any time give notice terminating this
Agreement.
5. 4 The Buyer shall have the discretion at its own expense to engage such
professional engineers and consultants as it considers necessary or
desirable to do so in order to comply with its obligation in clause 5. 1
above.
5. 5 The Buyer or its professional engineers will provide the Seller with
reasonable prior notice of the exercise of the licence to enter onto the
Property. The Seller or its representatives may attend and observe the
works carried out by or on behalf of the Buyer but shall at all times comply
with reasonable health and safety requirements of the personnel
undertaking the works.
5. 6 Neither the Seller nor its representatives shall be entitled to issue
instructions to or impose conditions on how the Buyer or its representative
or contractors carry out their activities provided the Buyer shall in
appointing any person to undertake works or services at the Property shall
require them to abide by all applicable legislation and carry out their duties
in accordance with good professional standards of care and skill
appropriate to their relevant disciplines and roles.
Submitted: 1 year ago.
Category: Law
Expert:  UKSolicitorJA replied 1 year ago.
John,
I believe the Buyers are giving notice to terminate the agreement on the grounds of cost as they cannot use the provisions of clause 5 as they did not give notice to you in writing within 30 days of receiving the geotechnical report that environmental conditions had not been met.
If you are happy to terminate the agreement as you have other interested parties, you may as well accept their notice of termination and inform them that you accept their notice to terminate the agreement and that the the NDA and exclusivity agreement will also terminate with immediate effect.
May I help further?
Customer: replied 1 year ago.

,

Thank you response, I forgot to mention the £50,000 deposit the buyer paid. If the buyer defaulted as you mention re Clause 5.2 should we retain the deposit, or if we respond as you mention i.e.We accept their notice. do we forfeit the deposit? Clause 8 below

My best regards

John

8. SALE AND PURCHASE OF THE PROPERTY

8. 1 Subject to clause 3 the Seller shall sell and the Buyer shall buy the

Property on the terms of this agreement.

8. 2 The Buyer shall on the date hereof pay the Deposit to the Seller's Solicitors

to be held as stakeholders. The Deposit is to be fully refundable to the

Buyer in accordance with clause 3. 3 but if this agreement is terminated on

account of the default of the Buyer the Deposit shall be paid to and

retained by the Seller absolutely.

8. 3 The residue of the Purchase Price shall be paid on Completion by the Buyer

to the Seller

Expert:  UKSolicitorJA replied 1 year ago.
I am not sure whether the Buyer has defaulted as they are not claiming termination on the grounds of the environmental condition.
It is arguable however that the buyer is defaulting the agreement on the grounds of not completing the purchase and you are therefore entitled to retain the deposit.
I would advise you to send them a written acceptance that you will treat the agreement as terminated as requested by them subject to you retaining the deposit and subject to the NDA and exclusivity agreement also terminating with immediate effect.
Hope this clarifies

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