Remedies for Delayed Completion

The exchanged contract will usually contain the date for the completion that parties agreed. If it does not then SE611 and SEPC911 provide that the completion date is twenty working days after the date of the contract. In both sets of conditions the money due on completion must be paid before 2pm on the day of completion and if it is not completion is treated as taking place on the next working day.

The next question to consider is what happens when of the parties is not ready to complete on time. Both sets of standard conditions provide for compensation to be paid with one significant distinction in the standard conditions both the buyer and seller can be asked this compensation whereas under the SEPCs only the buyer can be required to pay compensation. Compensation is calculated at the contract rate specified in the contract on the balance of the purchase price less any deposit paid for the period between contractual completion date and the date of actual completion. The compensation is calculated at a daily rate so it can be multiplied for the number of days of default.

Failure to complete on the contractual completion is breach of contract and the seller could make a claim for breach of contract under contractual principles. Damages will be assessed under the principles in Hadley and Baxendale with the measure being that of putting the claimant in the position that they would have been had the contract been correctly performed. Where it appears that the delay in completion is not likely to be resolved quickly a notice to complete can be served after the contractual time on the contractual completion date. Once served the notice to complete makes time of the essence and gives the other party ten working days to complete. If the defaulting party fails to complete within ten days then the party who has served the notice to complete can rescind the contract. If the contract is rescinded and the defaulting party was the buyer the seller is able to forfeit the deposit. If the defaulting party was the seller the seller must repay the deposit to the buyer.