Inner House case considering the enforceability of contractual obligations contained in missives after the missives ceased to be enforceable.

Background
Mr McPherson and Ms Macaulay (the pursuers) sold a house and garden ground in North Connel to the Macqueens (the defenders) whilst retaining some adjacent land on which they intended to build two semi-detached houses. The missives contained conditions obliging the defenders (who also owed an adjacent property) to convey a strip of land to the sellers and also to grant a servitude right of access over an additional strip of land. The missives incorporated the Combined Standard Clauses (2009 edition) which include a clause providing that the missives will cease to be enforceable after 2 years.

Arguments
The pursuers sought an order for specific implement in order to compel the defenders to convey the strip of land and grant the servitude. The action was raised outwith the 2 year period and the defenders argued that it was time barred (as the obligations were either part of the missives or collateral to them and consequently ceased to be enforceable when the missives ceased to be enforceable). That argument was rejected in the sheriff court; the sheriff taking the view that the obligations to convey the strip and grant the servitude formed a separate contract to the sale of the house and garden (albeit recorded in the same document).

Decision
However, the Inner House allowed an appeal of the sheriff’s decision. The court agreed with the defender’s contention that the obligations to convey the strip of land and grant the servitude formed part of the overall consideration (in addition to the purchase price of £245k) and, as such, were an intrinsic part of the contract for the sale of the property and became time barred when the missives ceased to be enforceable.

The full judgement is available from Scottish Courts here.

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