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Property sale contract in joint names valid with one signature

A Court of Appeal case has decided that a contract for sale of property in joint names is valid when signed by a single purchaser. This means it will be upheld but only against the person who signed the contract.

Generally, to be effective, a contract for the sale of land must be in writing, incorporate all the terms that have been expressly agreed, and be signed by all parties to it. But, a recent case has looked at whether a contract for sale intended to be entered into by joint buyers is valid where only one of the joint purchasers has actually signed it.

Marlbray Ltd v Laditi and another [2016] EWCA, involved contracts for the purchase of 999 year leases of hotel rooms at the Park Plaza Westminster Bridge Hotel.  The contracts were made by the developer of the hotel. 

One contract was in the name of a husband and wife, signed only by the husband and without his wife's authority. She had not known that her husband was entering into the contract and had not consented to him doing so. 

The Court of Appeal said that the contract will not be deemed invalid, for having been executed incorrectly. Instead it will be upheld against the single purchaser. This is a surprise because in this scenario, we would normally expect the contract to fail.

Therefore, if you are selling a property and want both purchasers to be bound, the contract should say this.  This could be relevant where you have doubts over the financial status of one of the parties, and you want both to be liable.  

We recommend that the contract is signed by both parties.  Alternatively, if only one party wants to sign, seek evidence that the signing party has authority to sign on behalf of both, so that you can enforce the contract against both parties.

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