In Nweze v Nwoko [2004] EWCA Civ 379; [2004] PLSCS 74, Waller LJ approved the statement in Emmet and Farrand on Title (19th ed) to the effect that section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 only requires that the contract be signed by the contracting parties. He commented that “that seems to be a valid criticism of the actual decision [in Jelson]”.
He avoided following Jelson Ltd v Derby City Council [1999] 3 EGLR 91 by suggesting that only those contracts that come within the narrow definition of contracts for sale are subject to the section 2 requirements: “It may be that in a situation such as existed in the Jelson case where A and B (the local authority) made a contract under which B can call for property to be transferred to a nominated buyer C (its housing association) on terms provided for in the schedule to the contract, that would be a contract to which section 2 would apply, because it is a contract for the sale or disposition of an interest in land rather as an option to purchase is such a contract… But the important point is that the ‘interest in land’ is the actual subject of the contract or disposition.” So, an agreement to enter into an agreement to sell with a third party does not have to comply with section 2, but an agreement between two parties to sell land to an identified third party does have to comply. However, compliance does not mean that the third party is required to sign the contract, so long as the contracting parties do so.
David Williams and Emma Slessenger are members of the real estate know-how team at Allen & Overy LLP
Start your free trial today
Your trusted daily source of commercial real estate news and analysis. Register now for unlimited digital access throughout April.
Including:
- Breaking news, interviews and market updates
- Expert legal commentary, market trends and case law
- In-depth reports and expert analysis
In Nweze v Nwoko [2004] EWCA Civ 379; [2004] PLSCS 74, Waller LJ approved the statement in Emmet and Farrand on Title (19th ed) to the effect that section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 only requires that the contract be signed by the contracting parties. He commented that “that seems to be a valid criticism of the actual decision [in Jelson]”.
He avoided following Jelson Ltd v Derby City Council [1999] 3 EGLR 91 by suggesting that only those contracts that come within the narrow definition of contracts for sale are subject to the section 2 requirements: “It may be that in a situation such as existed in the Jelson case where A and B (the local authority) made a contract under which B can call for property to be transferred to a nominated buyer C (its housing association) on terms provided for in the schedule to the contract, that would be a contract to which section 2 would apply, because it is a contract for the sale or disposition of an interest in land rather as an option to purchase is such a contract… But the important point is that the ‘interest in land’ is the actual subject of the contract or disposition.” So, an agreement to enter into an agreement to sell with a third party does not have to comply with section 2, but an agreement between two parties to sell land to an identified third party does have to comply. However, compliance does not mean that the third party is required to sign the contract, so long as the contracting parties do so.
David Williams and Emma Slessenger are members of the real estate know-how team at Allen & Overy LLP
