13 February 2015

Buyers need to obtain appropriate surveys and need to be aware that Sellers have a right in some circumstances to issue a notice to complete the sale, even if issues arise and the Buyer no longer wants to.  The case of the Hardy v Griffiths in December 2014 serves as a valuable reminder of the need to take professional advice when buying properties.


The sellers purchased a large mansion house in 2006 and restored it. The property was put on the market in 2010 and contracts with the buyers were exchanged on 1 April 2011 for £3.6 million. The contract for sale incorporated the Standard Conditions of Sale (Fourth Edition) with a special condition that the buyers did not rely on any representations by the sellers.

A side agreement extended the completion date and provided compensation for late completion. The buyers failed to complete on the agreed completion date. The sellers served a notice to complete and requested the balance of the 10% deposit due when the notice was served. The buyers failed to comply with the notice to complete and the sellers issued proceedings.

The sellers sought an order that the contract had been rescinded, the 10% deposit forfeited and damages for breach of contract.

The buyers argued that the sellers misrepresented the state of the property as it suffered damp and rot. They sought an order to rescind the contract and return the deposit with damages for misrepresentation. Significantly, the buyers had not obtained a survey before exchanging contracts.

Decision / Significance

The High Court held that the sellers were entitled to rescind the contract, recover the 10% deposit plus sums agreed under the side agreement.

The buyers’ misrepresentation argument about damp and rot was rejected. This judgment serves as a reminder of the strict requirements of caveat emptor (buyer beware) and highlights the need for any prospective buyer to obtain a full survey, particularly where the contract excludes reliance upon sellers’ representations.

The judgment also provides a clear summary of the law relating to rescission of a land contract and how to deal with a deposit in this situation.

The buyers have applied for permission to appeal which will be heard in late February or early March 2015.

The author Charlotte May is part of our real estate litigation team working with James Sutherland.

Key contact

James Sutherland

James Sutherland Partner

  • Head of Real Estate Disputes
  • Dispute Resolution
  • Professional Negligence

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