EFFECTS OF EXCHANGE OF CONTRACT
Exchange of Contract is the procedure by which a contract is made binding on the parties.
The procedures for exchange of contract include the following:
1. Vendor’s solicitor prepares and sends a copy to the purchaser’s solicitor for any amendment.
2. The purchaser’s solicitor on approval sends the copy back to the vendor’s solicitor who then engrosses the document after effecting the necessary corrections; produces two plain copies and sends a copy to the purchaser’s solicitor for signing while he retains the other copy for the vendor to sign.
3. When the purchaser signs, the rule is that he moves the vendor by taking his own signed copy to the vendor’s solicitor together with the deposit in exchange for the vendor’s signed copy.
4. The exchange takes place in the vendor’s place or vendor’s solicitor’s office or exchange can be by post, email, telephone, fax depending on what is agreed by the parties.
Rights and Obligations of the Parties under the Contract
1. In relation to Vendor
(a) Entitlement to balance of the purchase price.
(b) Entitlement to rent and profits until completion unless agreed otherwise
(c) Lien on the property for the unpaid price.
2. In relation to Purchaser
(a) Equitable owner of the property
(b) Entitlement to transfer his equitable interest in the property to another.
(c) Protection of his equity by obtaining an injunction preventing the vendor from transferring the property to a third party or committing any act of voluntary waste.
(d) Suing the vendor to specifically perform or complete the transfer or for voluntary waste which depreciates the property.
NB: This article is not a legal advice, and under no circumstance should you take it as such. All information provided are for general purpose only. For information, please contact chamanlawfirm@gmail.com
WRITTEN BY CHAMAN LAW FIRM TEAM
EMAIL: chamanlawfirm@gmail.com
TEL: 08065553671, 08024230080