The client entered into a 90-day Reservation Agreement on 5 April 2023 for the purchase of a property in London W4, at £3.45 million, with a mutual commitment of £50,000. The estate agent was Fine & Country. Following the agreement, the Seller received a higher offer from a third party. On 2 May, the client’s representative increased the offer by £95,000, which was accepted and confirmed via a new Sales Memorandum. On 18 May, the client’s solicitors informed the Seller that the buyer would now be the client’s mother. The Seller rejected this substitution and alleged breach of the Reservation Agreement. An Expert Determination later found that while the Seller had technically breached the agreement by entertaining a third-party offer, the Buyer’s conduct, via substitution, constituted a waiver and breach of the agreement.
The client sought advice on potential claims against the Seller and estate agent for misrepresentation, alleging that the property lacked planning consents and that he was pressured into signing the Reservation Agreement without legal advice. He also questioned the handling of the substitution and the enforceability of the agreement.
Counsel advised that no actionable misrepresentation or duress claim could be sustained, as no Contract for Sale had been entered into and the client had the opportunity to seek legal advice before signing. The client’s own actions, failing to terminate the agreement upon receiving a counteroffer and substituting the buyer, undermined any potential claim. Regarding planning consents, counsel reiterated the principle of caveat emptor, noting that due diligence should have been conducted prior to signing. The clients accepted and understood the advice.
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