Legal Hypothetical: Mid-transaction Tragedy

 

Mid-transaction Tragedy

ROBERT sells his home for $1 million.

A deposit of $100,000 is paid on the exchange of contracts and settlement is scheduled to occur 42 days later.

Unfortunately, Robert unexpectedly passes-away three weeks after contracts are exchanged.

The contract contains the standard conditions, which do not allow the purchaser to ‘rescind’ or cancel the contract in the event of the vendor’s death.

The contract does however include the usual provision that if the vendor is unable to proceed to settlement, the purchaser can issue a 14 day notice, after such time they are entitled to terminate the contract and have the deposit returned.

Robert’s son Peter, makes an urgent appointment with Robert’s solicitor.

Peter discovers that he is appointed as his father’s executor.

However, he is also advised that in order to proceed to settlement of sale, he will need to obtain a grant of probate and that this can take several months.

Peter is worried about losing the sale and the prospect of a damages claim against the estate for breach of contract.

Peter is advised by the solicitor that he can make an urgent application to the Supreme Court for a special grant of administration which will allow the sale to proceed.

The solicitor proceeds to draft affidavits, outlining the execution of Robert’s will and explaining the urgency of the application.

The Court conducts an urgent hearing and after carefully considering the application, appoints Peter as the administrator of Robert’s estate, with limited temporary powers of administration which allow him to execute the documentation that is required to complete the sale and to pay the proceeds of sale into the solicitor’s trust account, on behalf of the estate.

The Court dispenses with the usual requirement of advertising the administrator’s intention to apply and other evidentiary requirements, on the basis that Peter will ultimately obtain a grant of probate which will supersede the limited grant.

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