Gazumping. What is the purpose of "subject to contract"?

[monkeyboy]

When one agrees a price and pays a deposit no contract yet exists.

Any document signed at this stage is "subject to contract".

Can anyone advise as to why this is? Why should the vendor have such protection ?

What purpose does this serve that property deals are treated differently than others?

Im sure its historical, pure curiosity brought on by a recent post
cheers
MB

 

[mf1]

The protection works both ways. Purchasers regularly change their minds too.

"Please note that we do not have any authority either express or implied to bind our clients in any way and we must emphasise that neither this correspondence nor any negotiations had between our clients shall constitute a note or memorandum within the meaning of the Statute of Frauds until such time as both contracts are signed, exchanged and a full deposit is paid."

The above is the standard wording used in correspondence between the solicitors until the deal is legally binding.

mf

 

[monkeyboy]

The protection works both ways. Purchasers regularly change their minds too.

"Please note that we do not have any authority either express or implied to bind our clients in any way and we must emphasise that neither this correspondence nor any negotiations had between our clients shall constitute a note or memorandum within the meaning of the Statute of Frauds until such time as both contracts are signed, exchanged and a full deposit is paid."

The above is the standard wording used in correspondence between teh solicitors until the deal is legally binding.

mf

Fair enough, i suppose the negative side of this is the one most people ar efamiliar with recently due to recent property boom.

In a few years perhaps we will here developers crying about being underzumped! ha ha !