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Options - compliance with terms |
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Suppose you have an option, but the other side have already made it
clear that they will not recognise the validity of that option. You then go
ahead and give notice that you intend to exercise the option (knowing
that they will dispute it), but must you also tender the required deposit?
The answer, quite clearly, is ‘yes’. If you want to exercise your rights
under an option then you must comply fully with all the terms.
This was confirmed in a recent case where lengthy negotiations resulted
in it being agreed that T could buy the property for £1.75m (or £1.82m
after a certain date). Unfortunately L’s solicitors made a typo, so the
£1.75m was typed in as £1.17m. In due course, T made it clear he
would exercise the option (at £1.17m) and L made it clear he would not
sell at that price. In due course T served his notice under the option but
did not bother to include the 10% deposit required (because L had
already made it clear that he would not accept the validity of the option
at that price). It was held that T had not complied with the terms of the
option and thus he could not proceed. Also, the court said that it would,
in any event, have rectified the agreement to correct the price to
£1.75m. Petrol v Industrial [2006], Property Week 22 September.
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November 2006 |
