I start by citing the Law of Property (Miscellaneous Provisions) Act 1989, s 2(3).
(3) The document incorporating the terms or, where contracts are exchanged, one of the documents incorporating them (but not necessarily the same one) must be signed by or on behalf of each party to the contract.
Oxford University Prof. of English Law, Ben McFarlane, expounds this far more understandably.
4.6 The requirements for a valid contract for the sale or other disposition of an interest in land are provided by section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 (LP(MP)A 1989). Under that section, for a contract for sale of land to be valid it must:
• be in writing;
• incorporate all the terms the parties have expressly agreed (by setting out the terms or by reference to another document) either:
in a single document signed by both parties; or
– in each of two documents signed by one of the parties and exchanged.1
Under s 2, the written contract may take one of two forms:
a single document signed by both parties; or separate documents each signed by one of the parties and exchanged. The document—or each document, in the case of an exchange—must contain all of the terms expressly agreed by the parties. The terms may be contained in the signed document—or documents, in the case of exchange—or be contained in a separate document that is incorporated by reference.2
I have spoken to my friends and family. Everyone I know has heard of, and dealt with, merely the first form — that I highlighted in
gray. Nobody I know ever dealt with the second form — that I bolded and italicized.
Why didn't s 2 stick to the 1st form in gray? Why proffer the 2nd form?
What are the 2nd form's advantages? What can the 2nd form accomplish that the 1st form cannot?
For the 2nd form, why didn't s 2 require everyone to sign both separate documents? This feels safer, more conclusive, steadfast than merely 1 signature on each of the 2 documents.
1 Land Law Core Text Series (2020 2 edn), p 96.
2 Land Law Text Cases Materials (2021 5 edn), p 253.