May 2019 – Standard Missives or “Language is difficult to put into words”

Author: Mitchells Roberton
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  • A purchase and sale of a flat or house requires a written contract. Such contracts will usually have an extensive array of clauses but many of these are common to virtually all such sales and purchases.  So, the solicitor profession has devised a set of “standard clauses” to cover these matters. Solicitors do not have to use these “standard clauses” but they have become the norm: generally speaking they help streamline the conveyancing process. The clauses are updated from time to time.
  • But where there is a dispute between purchaser and seller, even with carefully chosen words, there can often be room for argument. Not long ago, the Sheriff Appeal Court had to decide a case about the wording of certain of the “standard clauses” (Anwar v Britton 2019 S.L.T. (Sh Ct) 23).

Outline of the facts of the case

  • In 2016 the purchasers made an offer for a property in Strathblane which incorporated the “standard clauses” in force at that time and, additionally, said that the offer was conditional upon a satisfactory flood risk report being obtained. The report assessed the flood risk as low but recommended that the purchasers check with the sellers to confirm whether the property or surrounding area had flooded before.
  • The sellers’ solicitors emailed on 14th July 2016 to confirm that they had no experience of flooding at the property and the contract was concluded on 3rd August 2016.
  • Subsequently, the purchasers said that they discovered that in fact the stream flowing through the gardens of the property had overflowed in November 2015 and that, in fact, there had been flooding in the garden “from time to time”.
  • So, they wanted to unravel their purchase and one particular aspect of their case was that a clause in the “standard clauses” amounted to a “warranty” that the sellers were unaware of any flooding problems when the purchasers had evidence that, in fact, they were. 

The relevant clause in the standard missives

The clause said (emphases added): 

“2           Awareness of Circumstances Affecting the Property 

2.1          So far as the Seller is aware … the Property … is not affected by:….

2.1.3      flooding from any river or watercourse which has taken place within the last five years…”

The argument for the sellers 

  • Essentially, the argument for the sellers was that these words should be taken to mean what they say and, at the time of entering into the contract for the sale, the sellers were able to state – with accuracy – that the property “is not affected” by flooding which “has taken place within the last five years”.
  • In other words, the sellers said the terms of this clause were perfectly clear and they were only required to disclose any flooding which (1) had happened in the past five years and (2) had a continuing – present tense – effect. When the contract for sale was made they could accurately state (or “warrant”) that the property “is not affected by” flooding because all was then dry.

The argument for the purchasers 

  • Essentially, the argument for the purchasers was that the sellers’ literalist approach to interpreting the clause was absurd. It was argued that if the sellers were correct it would result in a purchaser having a remedy if the property flooded once last week and was still wet but not if it had flooded multiple times in the last five years but was currently dry.

The court’s decision 

  • Essentially, the court decided that if one deconstructs the clause in question it is, in fact, not as clear-cut as the sellers tried to argue and, in any case, one needs to have regard not only to the words actually used but also to the context within which they are used. One particular point made by the court was this:

“…the meaning contended for by the [sellers] makes little sense. It is unlikely that a purchaser would wish to have a warranty that the property is not presently affected by flooding when such a circumstance might be expected to be obvious to the purchaser or his surveyor in any event.” 

The current edition of the standard clauses 

  • Since the court battle about this first started the standard clauses have been amended and now read (emphasis added):

“2           Awareness of Circumstances Affecting the Property 

2.1          So far as the Seller is aware … the Property … is not affected by:….

2.1.3      (nor has been affected by) flooding from any river or watercourse which has taken place within the last five years…” 

Note: This material is for information purposes only and does not constitute any form of advice or recommendation by us. You should not rely upon it in making any decisions or taking or refraining from taking any action. If you would like us to advise you on any of the matters covered in this material, please contact Ian Ferguson: email Ian@mitchells-roberton.co.uk

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