It is, thankfully, relatively unusual for a seller of a property to be faced with a buyer who pulls out of a house sale and refuses to fulfil their obligations under a contract. But it sometimes it does! So what happens when a buyer pulls out of a house sale?

On the rare occasions that this does occur, it has generally been accepted that the seller's best option is to rescind the contract ('missives' as they are known in Scotland) and to claim damages from the purchaser.

In doing so, the seller is able to recover any loss that they have suffered as a result of the purchaser's breach of contract:

• namely the costs incurred in re-marketing and selling the property to a third party and,
• potentially the difference in the price obtained in a subsequent sale to the price agreed with the original purchaser.

Following a case heard by the Court of Session, it appears that a seller has a second option when faced with a breach of missives: they will be able to enforce the contract and require the purchaser to pay the full purchase price.

In this case, Mr and Mrs Law entered into a contract to buy a property 'off plan' from AMA Limited, but the transaction later fell through when it became clear that the Laws were not willing to proceed with the purchase. AMA subsequently sued the Laws for payment of the balance of the purchase price and the Court agreed that they should be successful.

In the vast majority of cases a purchaser's breach of contract will stem from an inability to afford to pay for the property, so there will be no benefit in the seller demanding payment of the price.Their best option would instead be to resell the property and seek damages. However, if it is clear that the purchaser still has the funds to pay for the property (as in this case) and is simply unwilling to proceed, the Court has ruled that under these circumstances a seller should be entitled to insist on enforcement of the contract and demand payment of the full purchase price.

The Laws have said that they will appeal the ruling at the UK Supreme Court and we will watch with interest to see if they have any success in overturning the Court of Session's decision.

If you are interested in purchasing a property or selling your existing home, our residential property department would be delighted to help.