To determine whether there is a legally binding contract, the parties must demonstrate their intention to be legally bound by the document. Masters v. Cameron of 1954 is the landmark decision in this area, establishing key principles for determining whether or not there is an intention to be legally bound with respect to provisional agreements. The High Court case considered whether a preliminary agreement on the sale of farmland constituted a binding contract without the performance of a formal contract. Although the wording used in the drafting of the pre-agreement is important in deciding the intention of the parties, it is not decisive. Recent decisions indicate that the courts will endeavour to implement the commercial intent, taking into account the surrounding circumstances, as it behaved during and after the preliminary agreement. Preliminary agreements reveal all the details a builder needs to cite a construction on your land that is specific to all the characteristics of the land and its local community or domain requirements. For example, John is a contractor and is tired of spending money on preliminary work (p.B site visits, creating a design plan, etc.) for potential clients, only to find out later that the client is no longer interested due to a change of mind. John can prevent this by sub-securing a preliminary agreement with all potential customers. His written agreement can be used to say: ATTENTION! The preliminary contract signed with a promoter can be called a “membership contract” because you adhere to it without being able to negotiate the terms. In other words, this contract is usually imposed by the developer.
So you should read it carefully, as preliminary contracts created by developers are often one-sided. If you have any doubts about its content, contact a lawyer or notary with experience in co-ownership law. The builder or developer is obliged to deliver the property on time and according to the specifications agreed in the preliminary contract and to transfer ownership of the property. The decision in Brice v. Chambers & Ors  is indicative of the growing importance of conduct as a key factor in determining intent. In the present case, the Court of Appeal concluded that the oral proceedings on the sale and purchase of Wagyu cattle established a legally binding agreement between the parties. The Court held that the parties had committed separate conduct under the alleged agreement. The decision was taken despite the fact that not all the conditions were agreed or understandable.
The sale of a residential property to a natural person who buys it to live on it, whether it has already been built or is built by a builder or developer, must necessarily be preceded (this is required by law) by a preliminary contract. A preliminary agreement is reached between the parties with the intention of concluding a more comprehensive agreement at a later date. From a legal point of view, there are only two types – those that are legally binding and others that are not. The parties reach the final terms and intend for their agreement to be binding, with a “formal contract” containing a more complete or precise form of the agreement signed later. .