Search

How can we help?

Icon

Before you sign on behalf of your partner…

In the recent case of Marlbray Ltd v Laditi and another [2016] EWCA Civ 476, the Court of Appeal decided that a contract signed by a buyer on behalf of himself and his wife without her authority was valid.

The husband (H) and wife (W) attended a developer’s sales fair, but W spent most of the day outside of the sales fair looking after the couple’ children. Whilst at the sales fair, H retained one of the law firms attending the fair and signed a contract naming himself and his wife as joint purchasers. H paid a reservation deposit as well as a further deposit of 25% of the purchase price and contracts were exchanged. Despite this, the couple could not raise the remaining balance of the purchase price, resulting in the developer rescinding the contract and forfeiting the deposit.

A judge found that the contract was not ‘valid and enforceable’ because W had paid little attention to the fair’s events, had not instructed the solicitors, signed the contract nor authorised her husband to sign it on her behalf, and had not subsequently ratified the contract. The trial judge, relying on the case of Suleman v Shahsavai [1988] 1 WLR 1181, found that there could be no binding contract as H had no authority to sign on behalf of W.

On appeal by the developer, the Court of Appeal found that there was a valid and enforceable contract between the developer and H. The Court of Appeal distinguished this case from Suleman on the basis that joint owners could not act alone or sell the property individually.  Whereas, in this case, the contract H signed provided that ‘where two or more persons constitute the Purchasers all obligations contained in this Agreement on the part of the Purchaser shall be joint and several obligations on the part of such persons’. There was no reason why H should not be contractually bound by his several obligations.

Additionally, there was no evidence that H had executed the contract conditional upon W being a joint purchaser, so a binding contract could still arise between the developer and H, even if it was intended that W would also be a party to the contract.

The Court of Appeal also dismissed H and W’s argument that the contract did not comply with section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 which provides that a contract for the sale of an interest must be signed ‘by or on behalf of each party’. It did not affect H’s several obligations under the contract just because W’s joint obligations were not enforceable.

Chambers and Partners

The Clarkslegal team are commercial and good to work with. They get what our business needs and tell me what I need to hear.

This case highlights that law firms should always ensure they have obtained clear instructions from all of their clients.  Equally, where there are two or more purchasers involved in a transaction, no purchaser should assume they have the authority to bind the other. All purchasers will need to be consulted unless specific authorisation has been given to permit one purchaser to act on behalf of another. This can apply to couples, as demonstrated in the case above, but also business partners who are in the process of purchasing a commercial property.

About this article

Disclaimer

This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full General Notices on our website.

About this article

Read, listen and watch our latest insights

art
  • 06 June 2025
  • Immigration

MAC Report: Immigration Support for IT and Engineering Professionals

On 29 May 2025, the Migration Advisory Committee (MAC) published its much-anticipated review on the use of the UK immigration system by professionals in IT and engineering.

art
  • 04 June 2025
  • Corporate and M&A

Authorised Corporate Service Providers – what you need to know!

The Economic Crime and Corporate Transparency Act 2023 (ECCTA 2023) intends to enhance the transparency of corporate structures with an aim to reduce economic crime.

art
  • 04 June 2025
  • Privacy and Data Protection

Decrypting the ICO’s Draft Updated Guidance On Encryption

Where data breaches are easily achieved by human error, encryption not only offers a secure way of sending personal data, but also provides another layer of protection if a data breach was to occur.

Pub
  • 27 May 2025
  • Corporate and M&A

Thinking of exiting your business? Part 3

In the third and final episode of our three-part podcast series, join Stuart Mullins and Nicky Goringe Larkin as they discuss the sectors that are currently popular for business exits, as well as those that may have difficulty attracting buyers.

art
  • 27 May 2025
  • Privacy and Data Protection

Extension of UK adequacy: The European Data Protection Board adopts the European Commission’s decision

Earlier this year, the European Commission adopted an extension of the two 2021 adequacy decisions with the UK for a period of six months, until 27 December 2025.

art
  • 21 May 2025
  • Immigration

UK Immigration 2025: Essential Updates for Employers

In our most recent and timely webinar held on 7 May 2025, the immigration law experts here at Clarkslegal LLP provided employers with a critical update on recent and upcoming changes to UK immigration policies and laws.