The recent High Court case of Francis v.Knapper highlighted the need to give proper consideration to replies given to pre-contract enquiries.
As a seller, wading through pages of CPSE (commercial property standard enquiries) questions to fill in for a buyer is never a task to be relished but it is important to ensure the information you are supplying is accurate.
In this case the buyer paid £1.35 m for a holiday park. There were a number of problems on site (the amenity block suffered from damp rot, there had been flooding and problems with the sewerage systems) but when asked whether there were any defective conduits or fixtures, incidents of flooding or items requiring significant expenditure over the next three years the seller responded “no”.
Following completion the buyer brought a claim against the seller for damages saying he had been induced to enter into the purchase contract in reliance on the seller’s representations.
The court agreed that the seller’s representations were incorrect and that there was a potential claim for misrepresentation. On the facts however it was found that the buyer had probably not even read the replies to enquiries! He had bought the park after a couple of site visits and on the (incorrect) assumption that he could recover the cost of any necessary works under the service charge.
Whilst the seller may have had a lucky escape in this case under different circumstances it might have been found liable for a substantial damages claim. Take heed and if you are preparing replies to enquiries, don’t just take a cursory glance over the pre-prepared replies your solicitor has put together for you, make sure you read and agree with what they say!
The claimants were suing for damages following their purchase of a a holiday park. It was alleged that misrepresentations had been made by the solicitors and vendor about the condition of the park. The claimants lost for several reasons