Subject to contract

It is a habit in property transactions for everyone to stick “subject to contract” on everything they write. The reason for this in the past was that a contract to buy and sell property did not have to be in a special form and it could be created just by an exchange of letters – in other words, by accident! Putting “subject to contract” on a letter meant that the letter could not be treated as part of a contract, so it was safe to sign and send. But this was changed a few years ago and now a property contract can only come into existence if there is a written contract document signed by both parties (although they can each sign separate but identical forms which is how exchange of contracts normally takes place ). So you don’t really have to be concerned that anything you write might tie you into a contract. Most people still put “subject to contract” on just in case.  There is no point doing it after exchange of contracts, of course.

A side-effect of the change in law just mentioned is that you now have to make sure that anything you have agreed in negotiations with the seller is specifically included in the written contract. If it isn’t, then not only may the missing term be invalid, but the whole contract may be invalid too, on the basis that the supposed contract didn’t set out all the agreed terms.

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