Outer House case considering the interpretation of missives between two builders for the sale of land at Broomhouse in Glasgow. The land was to be sold by Bellway to Persimmon for £4.16m. Bellway were to undertake works before the sale and the date of entry was tied to Bellway’s completion of these works (which involved the upgrading of a road and construction of a roundabout).

In terms of the missives, if the works were not completed before the longstop date, Bellway were to offer an alternative site of comparable size and value to Persimmon. In a previous decision Lord Glennie found that, although Bellway were not breach of contract at the point they failed to complete the works, the alternative site they offered to Persimmon was not of comparable size and value and, following the failure to offer an alternative site, Bellway were then in breach of contract.

Persimmon’s letter giving notice that they were rescinding the contract referred only to the fact the works had not been completed in time and not to the failure to provide an alternative site. In these proceedings Bellway argued that, as they were not limited to only one opportunity to offer a suitable alternative site, the contract was still open for performance and they were not in breach of contract. However, Lord Glennie found that the contract had been validly rescinded by Persimmon’s letter. In doing so he confirmed the principle that, providing the intension to rescind is clear, the fact that no reason is given or the wrong reason is given is not normally significant. Further, although Persimmon failed to issue an ultimatum notice [1] before rescinding the contract, even if they had served an ultimatum, Bellway would have been unable to comply as they did not have a comparable site in their land bank at the relevant time. Also, as Bellway’s argument had been that the alternative site they had offered fulfilled the requirements of the contract, the service of an ultimatum notice would have served no purpose.

The full judgement is available from Scottish Courts here.

All of our property and conveyancing case summaries are contained in the LKS Property and Conveyancing Casebook here.