By a single commercial transaction the parties agreed to the grant of a lease, on terms that Tootal (the intending lessee), would carry out shop-fitting works, have the benefit of a three months rent-free period during the which the works were to be carried out, and on the satisfactory completion of the works, receive 30,000 pounds towards their cost from the intending landlord, Guinea Properties. The provisions as to shop-fitting works, rent-free period and the landlord’s contribution to the works were all contained in a document separate and distinct from the contract for lease.
Held: Since the land contract had been fully performed by the grant of the lease, there was nothing in section 2 adversely to affect the enforceability of the terms relating to the shop-fitting. When looking at the contract under the Act, the court allowed a ‘composite bargain’, i.e. to provide in a first contract for a second contract, the first contract amounting to consideration for the second. It may be possible for parties to hive off parts of their arrangements into separate and distinct contracts. Section 2 applies only to an executory contract for the sale or disposition of an interest in land. Once all the land elements of an alleged contract have been performed, the remaining parts of the alleged contract can be examined without reference to section 2.
Scott LJ said: ‘If parties choose to hive off part of the terms of their composite bargain into a separate contract distinct from the written land contract that incorporates the rest of the terms, I can see nothing in section 2 that provides an answer to an action for enforcement of the land contract, on the one hand, or of the separate contract on the other hand. Each has become, by the contractual choice of the parties, a separate contract.’
Scott LJ
[1992] 64 P and CR 452, [1992] 2 EGLR 80
Law of Property (Miscellaneous Provisions) Act 1989 2
England and Wales
Cited by:
Cited – Godden v Merthyr Tydfil Housing Association CA 15-Jan-1997
The Plaintiff was a building contractor; the Defendant a housing association engaged in developing suitable sites for residential accommodation for letting to tenants. Before the contract the parties had successfully completed what was been called . .
Cited – Kilcarne Holdings Ltd v Targetfollow (Birmingham) Ltd, Targetfollow Group Ltd ChD 9-Nov-2004
The defendant entered into an agreement for lease, incurring substantial obligations. When it could not meet them it sought assistance from the claimant, who now claimed to have an interest in a joint venture. The draft documentation originally . .
Cited – Grossman v Hooper CA 11-Apr-2001
The parties had lived together in the house, each contributing but held in the name of one only. The parties disputed the effect under the 1989 Act of a letter signed by each of them setting out their agreement as to the basis on which it was held. . .
Cited – North Eastern Properties Ltd v Coleman and Another CA 19-Mar-2010
The appellants challenged specific performance orders obliging them to complete the purchase of apartments, saying that the contracts had not complied with the 1989 Act, and that their repudiation of the contracts had been accepted. The contracts . .
Cited – Keay and Another v Morris Homes (West Midlands) Ltd CA 11-Jul-2012
The claimants sought damages alleging breach of contract. The defendants argued that the contract related to land, and since it was an oral agreement it was unenforceable under the 1989 Act.
Held: It was not possible that a contract which was . .
Lists of cited by and citing cases may be incomplete.
Contract, Land
Updated: 19 January 2022; Ref: scu.188873