Time Not of the Essence in Fee Reimbursement

The case concerning a buyer who failed to pay the legal fees of the vendor, as specified in the contract, and was therefore ruled by the court to have failed to complete the purchase has now been heard by the Court of Appeal.

The buyer paid the completion monies on the final completion date. However, the contract specified that the vendor’s legal fees were payable by the purchaser. Because these were not remitted, the vendor considered that the contract had been rescinded and retained the buyer’s deposit. The High Court ruled that the seller had the right to do this under the contract. The buyer appealed to the Court of Appeal.

The Court considered that the contract for sale of the property did not include the necessity to remit the legal fees as a condition of completion. The contract included the obligation for the buyer to pay various sums ‘on completion’, but with regard to the legal costs it simply required that the purchaser was ‘responsible for the legal costs incurred by the vendor’. This did not make the timing of the payment of the essence of the contract, therefore the Court of Appeal found that the payment of those costs was not a condition for the completion of the sale.

Chinnock v Hocaoglu & Anor [2008] EWCA Civ 1175. http://www.bailii.org/ew/cases/EWCA/Civ/2008/1175.html.

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