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Writing - s2 of 1989 Act

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Writing - s2 of 1989 Act

This page deals with a number of matters that arise out of s2 of the Law the Law of Property (Miscellaneous Provisions) Act 1989. It deals with them under three headings:
  • Section 2 and its basic application.
  • Situations that are not governed by s2.
  • Constructive trusts and estoppel - s2(5)

Section 2

Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 provides as follows:
    "(1) A contract for the sale or other disposition of an interest in land can only be made in writing and only by incorporating all the terms which the parties have expressly agreed in one document, or where contracts are exchanged, in each.
    (2) The terms may be incorporated in a document either by being set out in it or by reference to some other document.
    (3) The document incorporating the terms or, where contracts are exchanged, one of the documents incorporating them (but not necessarily the same one) must be signed by or on behalf of each party to the contract.
    ….
    (5) This section does not apply in relation to—
      (a) a contract to grant such a lease as is mentioned in section 54(2) of the Law of Property Act 1925 (short leases) [“for a term not exceeding three years .. at the best ren which can be reasonably obtained without taking a fine”];
      (b) a contract made in the course of a public auction; …
    and nothing in this section affects the creation or operation of resulting, implied or constructive trusts.."
An agreement varying an existing sale contract must also comply with the section (Keay v Morris Homes (West Midlands) Ltd [2012] EWCA Civ 900). The effect of s2 was spelt in that case by Rimer LJ:
    “… a document purporting to be a contract complying with section 2 will, if it does not include all the expressly agreed terms of the land transaction, not be a contract at all: it will be a nullity.....The only effect of non-compliance with section 2 is that, in default of such an outcome, neither side can sue the other for specific performance or ... THIS IS AN EXTRACT OF THE FULL TEXT. TO GET THE FULL TEXT, SEE BELOW

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