Kuljinder Kaur Thandi v Tripatpal Saggu

A contract for the sale of land is invalid under section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989 unless one signed document contains every term expressly agreed by the parties. A document may be immediately binding even though the parties intend solicitors to prepare further sale documents. Proprietary estoppel may nevertheless provide equitable relief for detriment caused by reliance on assurances contained in an invalid agreement, provided the relief does not enforce the failed contract or confer its expected bargain. Relief should address the minimum equity necessary to prevent unconscionability.

The claimant owned a mixed-use property and agreed with the defendant that he would purchase it for £270,000. The parties signed three letters recording payments and principal terms, but other express terms, including a 10% deposit payable on exchange and arrangements for legal costs, appeared in earlier or later documents. The defendant later pursued contractual, equitable and restitutionary remedies after the sale did not proceed.

The court determined whether there was a binding and formally valid contract, whether the arrangement was subject to contract, whether undue influence or duress affected the agreement, and what relief was available under proprietary estoppel, common law and restitution.

1. Contract and formalities. The parties agreed a sale price of £270,000, a 10% deposit payable on exchange, funding of the claimant’s legal costs and a long-stop completion date. The three signed letters did not contain all the expressly agreed terms. Section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989 therefore rendered the sale agreement invalid. The three letters effectively replaced one another, so the one-document requirement was not itself decisive.
2. Immediate intention to be bound. The arrangement was not impliedly subject to contract. An agreement that solicitors will prepare further documents does not automatically prevent immediate contractual intention. The language of the letters, including their execution and reference to agreed obligations, indicated an intention to be bound immediately. This conclusion was obiter because the agreement failed section 2(1).
3. Vitiating factors. The claimant understood the general nature of the documents and voluntarily signed them. The presence of her children and general financial pressure did not amount to duress. There was insufficient pleaded material to establish a relationship of trust and confidence or a transaction calling for an explanation for presumed undue influence. A new defence of non est factum was not permitted and would in any event have been difficult to establish.
4. Proprietary estoppel. The court accepted that section 2(1) does not prevent equitable relief merely because an assurance was contained in a non-compliant agreement. The claimant must still establish assurance, reasonable reliance, detriment and unconscionability. Relief must remedy the detriment or minimum equity necessary to prevent injustice, rather than enforce the invalid bargain or give the defendant the anticipated undervalue.
5. Relief and outcome. The claim for contractual damages failed. Specific performance would also have been refused, even if the contract had been valid. The defendant could recover £15,000 on the assigned debt, £5,000 in restitution for deposits paid, and £1,150 towards aborted legal costs. The proposed uplift in the property’s value was refused as an unwarranted benefit.