Buying a house is a complex process with lots of legal and financial considerations. The conveyancing steps are crucial to making sure everything goes smoothly and legally. While the process usually takes 8 to 12 weeks in England and Wales for residential properties and 4-8 weeks for new build properties, this can vary depending on how complicated the purchase is, how big the chain is, how quickly everyone responds, and any unexpected issues that might come up. It’s important to stay patient, and keep in mind that delays can happen. Being prepared and proactive with your paperwork can help move things along.

Steps to Buying a House

Conveyancing is the legal process of transferring ownership from the seller to the buyer. Here’s a breakdown of how it usually goes:

Getting Started

The buyer hires a conveyancer (such as Franklins Solicitors LLP) to handle the legal side of things once the offer on the property has been accepted. The conveyancer will do identity checks and ask for some initial information, such as proof of funds.

Property Information and Title Checks

The seller fills out a property information form, and their solicitors send over official copies of the title register and plan from the Land Registry, along with any other key details. These documents provide crucial information about the property.

Local Searches

The conveyancer will carry out various checks with local authorities and other relevant bodies including Local, Environmental and Water searches; other searches may also be suggested to be carried out. These might include looking into planning permissions, building regulations, environmental issues, drainage, and other important details about the property and its surroundings.

Review and Enquiries

The conveyancer will review all the documents provided by the seller’s solicitors, ask the seller’s solicitor any necessary questions, and clarify any potential issues or discrepancies found during the process.

Mortgage, Survey and Source of Funds

If you need a mortgage, this is the time to finalise your application; it is recommended to have a mortgage offer accepted at an early stage of the transaction. The lender may require a valuation survey to assess the property’s value. You can also opt for a more detailed survey (like a Home Buyer’s Report or Building Survey) to identify any structural issues which can be arranged directly or via your estate agent. The lender will then issue a mortgage offer to you and your conveyancer. You will also be required to provide source of funds information to show how you will fund your purchase, the conveyancer will request the required documentation.

Contract and Mortgage Offer

Once all the necessary checks are done and everything looks good, you’ll be asked to sign the contract together with other documentation needed depending on the matter. By this point, your mortgage offer should be in place, and any extra conditions should be met.

Exchange of Contracts

The conveyancer will obtain your verbal authority and once obtained will then exchange contracts with the other side of the solicitors, using identical contracts, usually over the phone. This is when the deal becomes legally binding, and you’ll need to pay a deposit, if necessary. Also, if you are purchasing a residential property then the buildings insurance will be required to put in place.

Completion

On the agreed completion date, the remaining balance of the purchase price is transferred to the seller’s solicitor. You can then collect the keys and move in. Also, if you are purchasing a new build property then you will be required to put your buildings insurance in place.

After Completion

The conveyancer will handle the final details, like paying stamp duty, registering the property in your name at the Land Registry, and making sure any outstanding charges against the property are settled. The registration may take up to 2 years to register with Land Registry.

You can contact our Conveyancing team here or call on 01604 936512 / 01908 953674 or email info@franklins-sols.co.uk.

The High Court has held that a supplier’s standard terms and conditions were incorporated by reference when the customer signed an electronic order form, but that an onerous and unfair cancellation fee could not be enforced against the customer as it was not effectively incorporated into the contract.

In Blu-Sky Solutions Ltd v Be Caring Ltd [2021] EWHC 2619 (Comm), the supplier sent an electronic order form to its customer stating that all orders and contracts were subject to its standard terms and conditions set out on its website.  The customer signed the order form but later withdrew its order.  The supplier sought to enforce a cancellation fee payable under its standard terms and conditions but its customer argued that the clauses relied upon by the supplier were sufficiently unusual and onerous that they should have been brought to its attention fairly and reasonably by the supplier.

It was held that while the supplier’s standard terms and conditions had been effectively incorporated into the contractual relationship between the parties by reference, the clauses relied upon were not incorporated because, given they were unduly onerous, they should have fairly and reasonably been brought to the customer’s attention.

The decision makes it clear that where a signed contract incorporates terms by reference, where the terms are unduly onerous they need to be brought to the specific attention of the signing party.

For advice on contractual matters, including effective incorporation strategies, please Christopher Buck, Associate Partner and Solicitor, on 01908 660966 / 01604 828282 or by email at Christopher.Buck@franklins-sols.co.uk.

Photo by Sora Shimazaki from Pexels

Retention of title clauses are found in most contracts for the sale of goods.  The concept of retention of title is a simple one whereby the supplier of goods seeks to protect itself against non-payment by retaining ownership of goods until payment is received from the customer.

What is retention of title?

The concept arises from the Sale of Goods Act 1979.  The Act provides that property in goods will only pass when the parties to the transaction intend it to pass, thus allowing a supplier to retain title to goods after delivery of those goods to the customer.  A supplier wishing to retain title to goods until payment is made must ensure that this intention is expressly stated in their terms and conditions with the customer; otherwise it is implied by the Act that title will pass on delivery.

Retention of title clauses can be a powerful weapon for suppliers.  This is particularly so where a customer enters into an insolvency process since generally they can be enforced against insolvency office-holders (such as liquidators) and hence can, in roundabout terms, improve a supplier’s position compared to other creditors of their customer (including secured ones).  This is because the goods will not form part of the customer’s insolvency estate.  In corporate insolvencies there is rarely enough money to pay all creditors and hence the opportunity to obtain goods back can be an effective remedy for a supplier.

Where should a retention of title clause be incorporated?

Although a relatively simple concept, in practice, many suppliers get retention of title wrong.  A common reason for this is a failure to properly incorporate the terms and conditions which contain retention of title clauses into a contractual relationship with a customer.  I have lost count of the number of suppliers I have seen who have simply referred to their terms and conditions in their invoices to customers and expect this to be sufficient.

Incorporation is a matter of contract law.  The most effective way of a supplier evidencing incorporation is by producing terms and conditions signed by the customer confirming its assent to the terms.  Other modes of incorporation include taking steps to give reasonable notice of the terms prior to the goods being supplied.  Retention of title clauses commonly fail where a supplier seeks to rely on terms and conditions referred to or printed on an invoice or delivery note, where no written contract was in place before the goods were supplied.  Invoices and delivery notes are generally viewed as post-contract documents, meaning before the supplier has offered to supply goods and the customer has accepted that offer. 

What to do next

Businesses supplying goods on credit would be well advised to take a close look at their standard terms and conditions to check that they include a valid retention of title clause.  They should then ensure that their contracting techniques validly incorporate these into contracts with customers.  This may well require sales staff to be advised on how to effectively achieve this.

If you require legal assistance regarding terms and conditions or insolvency, please do not hesitate to contact Christopher Buck, Associate Partner in our Business Services team, on 01908 660966 / 01604 828282 or by email at christopher.buck@franklins-sols.co.uk who will be happy to assist.

From time to time a business may become involved in a contractual dispute whereby a large monetary penalty is sought. These disputes sometimes relate to penalty clauses that have been incorporated within a contract and understanding whether such penalties may or may not be enforceable is crucial to determining the extent of a defaulting party’s liability.

What is a penalty clause?

In simple terms, a penalty clause is a contractual provision that requires the defaulting party to provide monetary compensation to the innocent party in respect of a breach of a secondary obligation contained within a contract.

When is a penalty clause enforceable and which case law has changed the way we interpret penalty clauses?

In the landmark combined judgment of Cavendish Square Holdings BV v Makdessi; ParkingEye Ltd v Beavis [2015] UKSC 67, the Supreme Court sought to clarify the way in which penalty clauses should be interpreted in commercial contracts. The last case to substantially consider their enforceability was over 100 years ago in the case of Dunlop Pneumatic Tyre Company Ltd v New Garage Motor Co Ltd [1915] in which Lord Dunedin set out four key tests to be applied when determining whether the clause in question is a genuine pre-estimate of liquidated damages or a penalty.

The key tests applied under Dunlop involved assessing whether the extent of the monetary compensation sought was ‘unconscionable’ and ‘extravagant’ in comparison to the loss incurred by the innocent party. Consideration was also given to whether the loss was so disproportionate it could only be intended to deter a breach of contract. If the loss was found to be wholly disproportionate, it would be construed as a penalty and unenforceable.

The decisions of both Cavendish and ParkingEye reconsidered the tests to be applied when considering the enforceability of penalty clauses. They established that a clause can only be considered to be penal where it is a matter of substance, not form. In particular, in order to consider whether a clause in question is a penalty clause depends entirely upon whether the clause relates to a primary or secondary contractual obligation. If a breach of the obligation gives rise to a new one, this would be construed as a conditional primary obligation. However, in the instance that the breach gave rise to an obligation that would not otherwise exist, it would be a secondary obligation that is an alternative to damages and could be found to be a penalty clause.

The Supreme Court were keen to uphold the doctrine of penalties and, while acknowledging that Lord Dunedin’s key tests were still relevant, the majority held that the commercial approach to adopt was to have regard to the innocent party’s interests, whether these were being legitimately protected and whether the remedy the clause seeks to impose is proportionate to the innocent party’s interest. If these two tests can be established, the penalty clause will be enforceable.

Can a penalty clause be disputed?

A penalty clause may be disputed if the party to which the penalty is imposed against is of the opinion that the penalty sought far exceeds the innocent party’s attempt at quantifying a genuine pre-estimate of a loss incurred and which also seeks to act as a deterrent to the innocent party ever committing a breach of the relevant clause. Ordinarily, penalty clauses imposed in respect of primary obligations are enforceable. However, secondary obligations are not. It will be a matter of interpretation as to whether a penalty clause is enforceable applying the tests established following the Supreme Court’s judgement in Cavendish and ParkingEye.

For advice and assistance in relation to the drafting of a penalty clause within a contract or understanding the enforceability of any penalty provisions, contact Christopher Buck, Associate Partner & Commercial Solicitor within our Business Services team on 01908 660966 / 01604 828282 or email christopher.buck@franklins-sols.co.uk.

We regularly advise clients on contract disputes. The following are some of the key questions we are asked-

1. Do I have a contract?

There are a number of elements to a contract; namely:-

• An Offer
• An Acceptance
• Consideration – best described as one thing exchanged for another e.g. a sum of money in exchange for a service or goods
• An intention between the parties to create a legally binding relationship
• Certainty in the contract terms

2. Does a contract have to be in writing?

No, it can be in writing, agreed verbally or partly in writing and partly agreed verbally. It can even arise by implication from the conduct of both parties.

3. We are in negotiations, when is a contract formed and what constitutes an offer and an acceptance?

You will reach a contract stage when one party communicates an offer to another party, who then confirms that they accept the offer without any other condition.

Occasionally though a Court will consider the intention of the parties in their dealings in order to imply a contractual relationship.

4. I have a written contract but didn’t sign it – is it valid?

It depends.

Each matter will be different and be decided upon its own facts. Generally, when a contract has been written down and there is evidence to show that the parties intended to sign/execute a formal documented agreement, the courts will usually decide that the parties are not bound by the document unless signed by both parties. This will however depend upon circumstantial evidence surrounding the parties’ actions and their intent.

For further advice and assistance please contact our Private Client Team on 01604 828282 / 01908 660966 or email info@franklins-sols.co.uk

Yes, it seems so.

Recently the International Chamber of Commerce (“ICC”) released its statistics on Arbitration cases for the past 12 months. The results showed that in 2018, 842 new cases were registered with the ICC, involving 2282 parties from 135 countries and territories. The increase in the number of parties seeking Arbitration reflects the general trend reported by many of the other Arbitration institutions.

The statistics also showed increasing diversity in parties and arbitrators. Just under 41% of all parties to disputes filed with the ICC are based in Europe. Gender diversity of the arbitrators is now being published by some of the Institutions with the ICC confirming that 18.4% of confirmed appointments in 2018 were women.

Many disputes revert to Arbitration due to a contractual obligation to do so. Without such an agreed contract clause, the three popular means of resolving a commercial dispute remain litigation through the Courts, arbitration and mediation.

Time is considered a negative factor of litigation through the Court with the process often being criticised for taking years to complete. The average duration of ICC cases from start through to final award in 2018 was reported to be two years and four months. An award is the Arbitration Tribunal’s equivalent of the Court’s judgment. It is difficult to draw direct comparisons as with every arbitration there are occasions when the parties agreed to suspend and stay the process due to the flexibility that this type of forum offers. To expedite awards however, the ICC is seeking to limit any delays by offering expedited procedures to incentivise Arbitrators to draft their reward decision quickly post hearing. These measures allow the ICC to reduce Arbitrator’s fees when awards are not submitted within two months by a single Arbitrator or within three months by a three-member Arbitration Panel.

It is perhaps encouraging for some to note that the ICC has classified “younger” Arbitrators as those under the age of fifty and that younger Arbitrators made up 35% of the Arbitrators appointed in 2018.

If you have a contract dispute and your contract contains an arbitration clause, we can help.

For further advice and assistance please contact our Private Client Team on 01604 828282 / 01908 660966 or email info@franklins-sols.co.uk

During fraught exchanges, it is easy to miss the requirement to serve notice in the specific manner set out in your contract. Yet it is crucial and the Courts continue to address the point consistently when cases on the service of notice are heard. 

In the case of GPP Big Field LLP & Anor vs. Solar EPC Solutions SL [2018] EW HC 2866 the Court considered a claim for liquidated damages and whether a damages clause constituted a penalty and in doing so highlighted the consequences of failing to give notice in the prescribed manner.

The case: 

Prosalia UK Limited was engaged by GPP to construct solar power generation plants across the UK. Prosalia fell into insolvency and the contracts were assigned to its guarantor, Solar EPC Solutions.  GPP brought a claim against Solar for the delay in the power generation plants being commissioned in accordance with the timescales set out in the contracts.

How many contracts?

There were in fact five contracts which had to be assigned and in relation to one of those contracts, Solar raised an argument that objections from local residents amounted to a force majeure event resulting in Prosalia being entitled to an extension of the time to commission the generation plant.

The contract specified that the party seeking to argue a force majeure event was required to give notice to the other party. 

The Court held that because the contract contained specific notice requirements, notice of a force majeure event had to comply with these. Unfortunately Prosalias’ notice had not complied.

Always make sure you are aware of a contracts terms

This is a good reminder that where a contract specifies certain notice requirements, all notices served under that contract must comply with the requirements. It is important that all concerned in the contract and project management are fully aware of the contract terms and refer back to them. Failing to comply could result in being prevented from pursuing a claim that is conditional upon the service of a valid notice.

For further advice and assistance please contact our Private Client Team on 01604 828282 / 01908 660966 or email info@franklins-sols.co.uk