Formal exchange of contracts means that a binding contract will come into existence, withdrawal from which will mean liability for breach (see Remedies). Until such formal exchange has taken place either buyer or seller is free to withdraw from negotiations. The buyer’s solicitor needs therefore to check that all the Pre-Contract matters have been dealt with to his satisfaction before exchange, that is matters relating to:

• Searches
• Enquiries – SPIF and CPSEs
• Title – Registered/Unregistered rules
• Insurance
• Leasehold sales
• Occupiers – vacant possession
• Special Circumstances including capacity

In addition, it is necessary to check that the terms of the Contract are satisfactory and properly reflect the full agreement of the parties. In particular, the following should be checked:

• Conditions of sale
• Covenants for title
• Deposits
• Conditionality (ie Conditional contracts)