The Gazette 1979

GAZETTE

APRIL 1979

Intercontinental ascertained that the Plaintiff was still

willing to buy the lands for £110,000.00 and authorised a

local Manager of the Northern Bank to make an offer of

the lands to the Plaintiff for £110,000.00 which the

Plaintiff accepted, a letter was dictated by the Bank

Manager addressed to the Manager of Irish

Intercontinental Bank Limited which read:

"I hereby accept the offer to purchase the property

known as Park House and lands at Mallow, Co. Cork

containing 120 acrea 1 rood 30.7 perches for

consideration of £110,000.00 (One Hundred and Ten

Thousand Pounds)".

This was signed by the Plaintiff and his signature

witnessed by the Northern Bank Manager who

telephoned the Banking Manager of Irish Intercontinental

who expressed approval of what the Northern Bank

Manager had done and of the letter. Subsequently Irish

Intercontinental Bank's Solicitors sent out a letter, the

first two paragraphy of which read:

"We are instructed by our clients, Irish

Intercontinental Bank Limited, 91 Merrion Square,

Dublin 2, that they have accepted an offer of

£ 1 1 0 , 0 0 0 . 00 f r om your client Patrick Casey

Our clients are selling as Mortgagees pursuant to the

powers in that behalf contained in an Indenture of

Mortgage made the 14th day of November 1975 and the

power of Attorney dated 11th February 1975".

Although, curiously enough, the judgment of the

Supreme Court does not say so in so many words, it is

clear that the letter from Messrs. Cox & Co., was deemed

to be a Note or Memorandum in writing evidencing the

previous oral agreement made between the Plaintiff and

Irish Intercontinental Bank. As both the leading Irish and

English text books on conveyancing agree the "essential

elements" which have to be included for the Note or

Memorandum in writing to be effective are what are

referred to as the four "P's". The Parties, The Property,

The Price and any other essential Provisions. Now in the

Park Hall

case the detailed letter sent by the Agents to the

Financial Adviser clearly met all these requirements, the

Courts having held in a number of earlier cases that

various provisions which Defendants' Counsel had urged

were essential though omitted were not in fact essential

and could be implied, including such things as the time

within which the Contract would be signed, the payment

of a deposit or its amount or the date for completing the

sale. In the

Casey and Intercontinental

Bank case again

the note in writing clearly sets out the essential elements.

Although it is clear from the authorities that the nature of

the title to the property does not have to be spelled out, it

is surely significant that in each of these two recent cases,

the Purchaser was aware of the title, in the

Park Hall

case

because he had bought adjoining lands held under the

same title from the Defendants earlier and in the

Casey

case because the Plaintiff had been to the abortive auction

where presumably he had read the conditions of sale and

was thus aware of the title being offered. Perhaps the

most curious feature of the

Park Hall

case is that when

the proceedings were issued the Plaintiff was relying on

the letter of the Vendors Solicitor which sent out the

contract in January 1978 and it was only when discovery

of documents was ordered in the case that the

communication between the Defendants Agents and their

Financial Adviser became available to the Plaintiff. As

however the Supreme Court did indicate that the

Defendants were not entitled to require compliance by the

Purchaser with an arbitrarily imposed and unreasonably

short period for signing and returning the formal

Contract, it might not be unreasonable to assume that the

Supreme Court would have held the Solicitors letter and

the enclosed Contract to be together a Note or

Memorandum in writing sufficient to satisfy the

statute.

What then is the significance of these two

recent decisions for Solicitors? The significance for

Auctioneers is clear, that if they have, on behalf of a

Vendor, reached an oral agreement with a Purchaser as to

the terms of a proposed sale, then almost any letter which

they write, whether to their client or to the Purchaser,

unless it be totally inadequate as to its recital of the

agreed terms, will, no matter what attempt is made to

qualify, almost certainly be a sufficient note or

memorandum in writing to satisfy the statute. As far as

Solicitors are concerned it may well be that by the time

they get any instructions "the pass will have been sold"

and it is perhaps only in those cases in which the Solicitor

is directly involved in the negotiations himself that he, if

he has appropriate authority, may be found to have

bound his client firstly to the oral agreement and secondly

to have provided the necessary evidence thereof by

writing an opening letter, whether enclosing a draft

Contract or not, either to the prospective Purchaser or to

his Solicitors. It is understood that one firm of Solicitors

has already taken up the suggestion contained on Page

365 of Wylie's Irish Conveyancing Law that a statement

that the Solicitor is not to be taken as the agent of his

client for the purposes of Section 2 of the Statute of

Frauds (Ireland) 1695 by having a statement to this effect

printed on the firm's notepaper. Apart from wondering

whether the firm in question has read the footnote on

Page 365 which raises the possibility that the Solicitor

may be an express agent in a particular case, the writer

wonders whether in all cases clients would necessarily be

thankful to find that they had not been committed by their

Solicitor to a sale or perhaps more likely to a purchase. It

has often seemed strange to the writer that although most

practitioners must on average act for Purchasers as often

as they act for Vendors, conversations about this

particular topic always seem to centre around how to

avoid binding a Vendor from whom the Solicitor is acting

as if Vendors always wished to resile from their bargains.

Rarely does a Solicitor seem to consider that a Vendor

might want to get both parties bound as soon as possible.

The inescapable conclusion to come from these cases is

that much greater care must be exercised in negotiating

oral agreements on behalf of Vendors and Purchasers and

ensuring that whoever is involved in the negotiations be

they Auctioneer or Solicitor has firm authority from his

client either to conclude an oral agreement or that he has

the clients firm instructions to provide at the time of the

making of any oral agreement that it is to be subject to

subsequent conclusion of a written contract or to the

approval of title by both parties or to a subsequent formal

exchange of contracts or some other provision which will

clearly show that no completed oral agreement has been

reached. It now appears that any subsequent attempt in

writing to suggest that the parties are not already bound

may merely provide the evidence necessary to prove that

they are so bound.