The purchaser contracted to purchase a plot on a building estate belonging to the vendor. The contract provided that ‘the purchase is to be completed as soon as 300 houses shall have been erected on the said estate’. Thus the contract was one under which completion was conditional. It also contained a provision entitling the purchaser to rescind the contract by giving notice to that effect ‘if 300 houses shall not be erected on the said estate within two years from the date of this agreement’. The purchaser rescinded the contract and claimed a lien to secure repayment to him of the deposit paid by him on signing the contract. The vendor contended that there was no lien as the contract had not gone off due to any default of his.
Held: It was not necessary for the purchaser to show any fault on the part of the seller. Farwell J said: ‘The lien is created by the contract under which the money is paid as part of the purchase-money, and on the faith that the contract will be carried out, and not by default of the vendor. The default gives rise to the necessity for enforcing the lien, but the lien arises from the contract. I see no reason why a condition that, if 300 houses are not built, the purchaser may rescind should be held to differ in any way from the ordinary condition in a contract that, if the purchaser makes or insists upon any requisition or objection to the title which the vendor is unable or unwilling to comply with, the vendor may rescind.’
Judges:
Farwell J
Citations:
[1901 1 Ch 911
Jurisdiction:
England and Wales
Cited by:
Appeal from – Whitbread and Co Ltd v Watt CA 1902
The buyer agreed to buy a house when the developer had finished 300 houses on the site, but now sought return of his deposit.
Held: The developer’s appeal against an order for the return of the deposit failed.
Williams LJ said: ‘The lien . .
Cited – Chattey and Another v Farndale Holdings Inc and others CA 11-Oct-1996
The plaintiffs had paid deposits for apartments which were to be built. After the developer became insolvent the plaintiffs sought recovery of the deposits, saying they had a lien which preceded the claims of chargees.
Held: The one appeal . .
Lists of cited by and citing cases may be incomplete.
Contract, Land
Updated: 02 June 2022; Ref: scu.259717