If it’s not in, it’s not in!
By Bailey Compton 25 Jan 2023
You’re breaking a trust if it is not in!
The creation of a contract requires four elements to be present: Offer, acceptance,consideration, and intention to become legally bound. For a contract to be valid, valuable consideration must have passed between the parties. In a sale, it is the payment of the deposit.
Leverage has for five years been advocating that a contract for sale and purchase of land cannot exchange until the deposit can be seen in your trust account. In some quarters, Leverage’s position has been criticised, stating that a remission slip from a bank is sufficient for exchange. It is a risk not worth taking.
In a recent CPD course, one of our Leverage clan told us about a 3 million dollar sale. The Purchaser provided a remittance slip from the Bank of Kenya. Yes, it does really exist.
The Solicitors exchanged the contract, accepting the remittance advice. We are now near settlement, and the money is not here.
This contract is invalid! It may also prevent the Vendor from suing for the deposit, as there is no contract. Maybe they might have a claim for equitable fraud, but that is a difficult tort to prove.
These were solicitors, who should have known better. It is auctions we are concerned about. If you want to exchange in the auction period, make certain you get some cash off them to ensure you have consideration. If you can’t see it in your trust account, it hasn’t been paid.
Some of you dirty minded people may have thought I was being rude. I am not that sort of guy! If it is not in your trust, it is not in and exchange cannot occur. So if it ain’t in, it isn’t in!