This section is from the book "Dart's Treatise On The Law And Practice Relating To Vendors And Purchasers Of Real Estate", by J. Henry Dart . Also available from Amazon: A treatise on the law and practice relating to vendors and purchasers of real estate.
The conditions of sale should be printed and circulated some time previously to the sale, or at any rate in the auction-room, so as to give each person an opportunity of ascertaining the terms on which the property is sold. The system adopted by the Law Society (z) and by many provincial Law Societies, of having printed common-form conditions which are used on every sale, and to which are prefixed the special conditions under which the particular property is sold, has much to recommend it; the effect of the common-form conditions is well understood, and the attention of the purchaser and his solicitor is at once directed to the special conditions. The practice of having written conditions which are merely produced and read over, but not circulated in the auction-room, cannot be too strongly reprobated, and, if the purchaser is thereby misled or not fully informed on a material point, may result in the rescission of the contract (a).
Conditions should be printed.
Sects. 44 and 45 of the L. P. Act, 1925, contain a number of stipulations subject to which a contract for sale is to be deemed to be entered into unless expressly excluded or varied. Sect. 46 provides that the Lord Chancellor may from time to time prescribe and publish forms of contracts and conditions of sale of land, and the forms so prescribed shall, subject to any modification, or any stipulation or intention to the contrary, expressed in the correspondence, apply to contracts by correspondence, and may, but only by express reference thereto, be made to apply to any other cases for which the forms are made available (b).
v. Phillips, (1881) 8 Q. B. D. 437; 51 L. J. Q. B. 102, where allotments made in lieu of common rights formerly belonging to the owner were held not to pass with the farm. See the L. P. Act, 1922, under which manorial incidents (subject to compensation being paid as therein mentioned) are abolished.
(z) See General Conditions of 1925, issued by the Law Society.
(a) Torrance v. Bolton, (1872) 8 Ch. 118; and see sup. pp. 89, 104.
(b) Such statutory forms have been issued: S. R. & O. 1925, No. 779/L. 14. See Appendix, inf. p. 1085.
In the absence of stipulation, a bidder at an auction may, audibly, before the fall of the hammer, retract his bidding (c); a condition negativing this right is almost always inserted, and is recommended by Lord St. Leonards, who nevertheless expressed the opinion that it could not be enforced (d). But where an estate was sold under a decree of the Court, with the consent of a mortgagee who was not a party to the suit, and the highest bidder was the mortgagee's solicitor who withdrew his bid before the fall of the hammer, it was held that the solicitor "ought not to be allowed to defeat the sale," and that he was bound by his offer (e).
Against retracting biddings.
Whether or not binding.
In some cases it may be desirable that the vendor should reserve to himself the option of withdrawing any lots from the sale, whether they shall have been offered to public competition or not, as, e.g., in the case of a disputed bidding, or where there is not an adequate demand for the lots which are being brought into the market, or where, on the sale of a building estate, the lots which are first offered, and which from their position or other circumstances materially affect the value of the remaining lots, do not fetch the price put upon them, and are in consequence bought in.
For withdrawing lots.
On a sale by auction, it is usual to require payment of a deposit by the purchasers; and this is a prudent precaution on a 6ale by private contract. If the deposit will be of large amount, it may be well to provide for its investment, e.g.. in Exchequer Bills or upon deposit with bankers of repute, in order that there may be no loss of interest nor liability in respect to the depreciation of securities. Although the vendor is not bound to accept payment except in cash (f), the custom of auctioneers to accept the purchaser's cheque is reasonable (g), and, accordingly, where on a 6ale by a mortgagee the auctioneer accepted a cheque for the deposit and the cheque was dishonoured, it was held that there had not been such negligence as to deprive the mortgagee of the costs of the abortive sale (g). In a case where the conditions provided that "each lot will be offered subject to a reserve price. . . . The highest bidder will be the purchaser," and the auctioneer by inadvertence knocked down a lot to a bid which was below the reserve, and having discovered his error refused to sign a memorandum or accept a deposit, it was held that no action would lie by the purchaser against the auctioneer, either for breach of duty in refusing to sign the memorandum or for breach of warranty of authority (h).
Payment and investment of deposit.
(c) Payne v. Cave, (1789) 3 T. R. 148; Routledge v. Grant, (1828) 4 Bing. 653, 660; 6 L. J. O. S. C. P. 166.
(d) Sag. 14th ed. 14; referring to Jones v. Nanney, (1824) 13 Pr. at p. 99.
(e) Freer v. Rimner, (1844) 14 Si. 391.
(f) Johnston v. Boyes, 1899, 2 Ch. 73; 68 L. J. Ch. 425.
(g) Farrer v. Lacy Hartland, (1886) 31 Ch. D. 42.
Property knocked down below reserve.
The usual practice is to provide that the vendor shall, within a specified time, at his own expense, make and deliver to every purchaser an abstract of the title to the lot or lots purchased by him; but the vendor is, independently of any condition, bound to deliver an abstract, and in the absence of a condition within a reasonable time (i); a delivery of the title deeds is not sufficient (k); the condition, moreover, is useful as fixing the time for delivery. But if there is any doubt as to the vendor's ability to make out and deliver a sufficient abstract by the specified day, it is better to omit the condition: for if he fail to deliver the abstract within the period appointed, or if the abstract delivered be very imperfect, any condition binding the purchaser to make his objections within a specified time will (in the absence of express stipulation to the contrary) fail of effect (l); and in such a case the time when objections will be considered as waived will depend upon the general principles of the Court and the conduct of the parties (m).