Managing exchange of contracts (England and Wales)

Part of managing exchange of contracts is providing information about how it works so we take the opportunity here to discuss the mechanism for exchanging contracts.

Under English Law, a contract for the sale of land, in order to be binding, must be signed by the party to be charged or his agent and must contain all the particulars of the contract such as the names of the parties, a description of the land and the price. 

Procedure in England differs from the Republic of Ireland and Northern Ireland.  In the two Irelands, each party signs only one contract.  In England and Wales, the buyer and the seller sign identical copies of each contract. 

Contracts become binding when there is an exchange of contracts. 

The actual exchange of contracts is carried out in a telephone call between the two solicitors.  The buyer’s solicitor has to have received the deposit from the client. 

The following is the most commonly used procedure by which contracts are exchanged.  The Solicitors do a final check with each other to make sure, for example, that names are correctly spelt and the prices, deposit and completion date are correct and agreed.  The solicitors then agree that an exchange has taken place.  The contracts are then immediately dated and each solicitor undertakes to send the contract to the other. 

Sometimes, there is a chain of dependant sales and purchases.  Where that occurs, solicitors use the "hold to order" mechanism by which they release a contract.  When a contract is released, the buyer's solicitors is giving an irrevocable option to the Seller's solicitor to exchange contracts with him by a certain time. The Seller's solicitor can then exchange on his purchase first.  As long as he comes back to take the exchange of contracts before the time limited by the buyer's release, his client is protected.

Our service includes the facilitation of these processes.  We ensure that we receive from you your deposit, the signed contract and your permission to exchange contracts.  Before we actually exchange contracts, we take your instructions on the completion date (date of closure).  That date is inserted into the contract at the last minute.

Once contracts are exchanged, we will confirm this to you.

Related topics

Our job when acting for a buyer (England and Wales)
Our job when acting for a Seller (England and Wales)