Introduction
This letter of advice is prepared for Nigel, an overseas student, concerning his potential legal rights to the apartment at 25 Victoria Road, following an arrangement made with Marsha in June 2024. The purpose of this advice is to evaluate whether Nigel has enforceable rights to the tenancy of the apartment under English contract law, particularly given that Marsha has since sold the property to a third party, Peter, and refused to honour the initial agreement. This analysis will explore the elements of contract formation, the legal implications of the communications between Nigel and Marsha, and the remedies, if any, available to Nigel. The discussion will be grounded in relevant legal principles and statutes, such as the Law of Property Act 1925, to provide a comprehensive assessment of Nigel’s position.
Formation of a Valid Contract
Under English law, for a contract to be legally binding, it must comprise four essential elements: offer, acceptance, consideration, and an intention to create legal relations (Adams, 2010). In this case, Marsha’s advertisement on the college notice board in May 2024 can be construed as an invitation to treat rather than a formal offer, as advertisements typically do not constitute binding offers unless explicitly stated (Partridge v Crittenden, 1968). However, when Nigel expressed interest and met Marsha in June 2024, and she specified the rental terms at $25,000 per month with a move-in date approximately three months later, this could arguably be interpreted as a specific offer. Nigel’s agreement to these terms during the meeting might constitute acceptance, thereby forming a preliminary agreement.
Nevertheless, a significant issue arises with consideration—the price or value exchanged in the contract. While the rental fee of $25,000 per month was discussed, there is no evidence that Nigel provided any deposit or payment at the time of agreement, which may weaken the enforceability of the contract. Furthermore, tenancy agreements for a fixed term exceeding three years must comply with formalities under the Law of Property Act 1925, such as being made in writing and signed by both parties (Law of Property Act 1925, s.52). Since Nigel’s agreement with Marsha appears to be oral, followed only by a brief note in August, it may not satisfy these legal requirements, rendering the contract potentially unenforceable as a lease.
Intention to Create Legal Relations and Subsequent Communications
Regarding the intention to create legal relations, it is generally presumed in commercial arrangements, such as rental agreements, that parties intend to be legally bound (Adams, 2010). Therefore, it is reasonable to assume that both Nigel and Marsha intended to formalise a tenancy agreement. However, Marsha’s communication in September 2024, stating she had changed her mind and sold the property to Peter for $3.8 million, indicates a clear repudiation of the agreement. Nigel’s note in August confirming the arrangement could be seen as an attempt to solidify the terms, but without Marsha’s written acknowledgment or signature, it lacks the necessary formality for a binding tenancy contract.
Remedies and Nigel’s Position
Given the sale of the apartment to Peter with vacant possession, Nigel faces significant challenges in asserting rights to the property. Under English law, once a property is sold to a third party, the new owner is generally not bound by prior informal agreements unless they were aware of them (Law of Property Act 1925, s.199). There is no indication that Peter was aware of Nigel’s agreement with Marsha, further diminishing Nigel’s prospects of claiming tenancy rights.
However, Nigel may explore remedies based on breach of contract. If the court accepts that a valid oral agreement existed for a tenancy (despite formalities not being met), Nigel could potentially claim damages for any financial loss incurred, such as costs related to alternative accommodation or travel expenses (Treitel, 2011). Nevertheless, specific performance—an order compelling Marsha to grant tenancy—is unlikely, as courts are reluctant to enforce such remedies in property disputes involving third-party buyers.
Conclusion
In summary, Nigel’s legal position regarding the apartment at 25 Victoria Road appears weak due to the lack of formalities in the agreement with Marsha and the subsequent sale of the property to Peter. While elements of offer, acceptance, and intention to create legal relations may be present, the absence of a written contract and consideration paid at the time of agreement undermines the enforceability of the tenancy. Nigel is advised to pursue damages for breach of contract, if provable, to recover any losses incurred. However, reclaiming possession of the apartment is highly improbable under the circumstances. This case underscores the importance of formalising tenancy agreements in writing to avoid such disputes, and Nigel should ensure future arrangements comply with legal requirements to safeguard his interests.
References
- Adams, A. (2010) Law for Business Students. 6th edn. Pearson Education.
- Treitel, G. H. (2011) The Law of Contract. 13th edn. Sweet & Maxwell.
- Law of Property Act 1925, c. 20. London: HMSO.
