Weekly review: 8th – 12th October 2012

Building Management Ordinance: cause of action: common parts

Incorporated owners can bring proceedings under section 16 of the Building Management Ordinance provided the cause of action relates to common parts and is one enjoyed by all owners (and not only some of them). (Incorporated Owners of One Beacon Hill v Match Power Investment Ltd).

Contracts: deposits: forfeiture

A deposit is a payment made under a contract that is both a pre-payment of part of the price and a sign of a genuine intention to proceed. If the contract so provides, a deposit of the amount that is customary in the relevant market can be forfeited should the buyer fail to complete without lawful justification. If the deposit exceeds the customary amount then it will be susceptible to scrutiny and forfeiture will not be allowed unless there are special circumstances to justify the larger than usual deposit (Polyset Ltd v Panhandat Ltd).

Contract: memorandum

A memorandum must specify the parties, property and price (Rossiter v Miller).

Contract: memorandum: later formal agreement envisaged

Where there is a valid oral contract and a mutual understanding that the terms will later be recorded in a formal agreement, the contract nevertheless takes effect unless, as a matter of construction, the parties intended not to be bound until the formal agreement was entered into (Rossiter v Miller).

Contract: memorandum: ‘the vendor’

“Vendor’ is not a sufficiently certain description of a party to the contract (Thomas v Brown).

Contract: memorandum: ‘the proprietors’

“The proprietors’ is a sufficiently certain description of a party to the contract where there is no doubt as to who the owners are (Rossiter v Miller).

Contracts: oral contracts: recovery of deposit

Even though a contract is unenforceable, the terms of the contract concerning the deposit govern any deposit that has been paid. Thus, if the buyer withdraws from the purchase without justification, he cannot recover the deposit (Thomas v Brown).

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