MISSIVES EXPLAINED: WHEN IS A PROPERTY SALE LEGALLY BINDING IN SCOTLAND?
In Scots Law, “missives” effectively refer to a sequence of formal contract letters exchanged between the solicitors representing the purchaser and seller, which, when “concluded”, form a binding bargain for the sale and purchase of the property. These formal letters are signed by the solicitors on behalf of the purchaser or seller rather than the purchaser or seller signing themselves.
The first step towards achieving a binding bargain is the submission of a written formal offer by the solicitor acting on behalf of the purchaser to the solicitor or Estate Agents acting on behalf of the seller. This formal letter outlines the conditions of the offer such as the price, Date of Entry and the items to be included in the price etc. This would also usually narrate the conditions
attached to the formal offer such as the purchaser requiring to obtain a mortgage, the sale of their own property etc. It is important to note that the sale is not yet legally binding at this point.
If the offer is acceptable in principle, then the selling solicitor will take instructions from the seller with a view to issuing what is known as a “qualified acceptance”. Again, this is a formal letter that forms part of the “missives” and will typically tweak the terms of the initial formal offer so that these are more favourable to the seller e.g. deletion of suspensive conditions, clarifying regarding items to be included in the price etc. Again, the sale is still not yet legally binding at this point.
Once the “qualified acceptance” has been received, the purchaser’s solicitor will report on the terms of such to the purchaser to ascertain whether they are willing to accept these or if further adjustments are to
be made. If the purchaser is happy to proceed, then the purchaser’s solicitor will issue a “concluding missive”, which renders the sale and purchase legally binding. The purchaser would usually make sure that
they have everything in place in terms of their mortgage arrangements or their own sale etc before doing so, which can lead to a delay in achieving concluded missives.
Alternatively, if the purchaser wishes to make further amendments, then they will issue a further formal letter to tweak the contract further. There is no limit on the amount of formal letters that can be exchanged
between both sets of solicitors. The sale is only legally binding once a “concluding missive” has been issued following reaching full agreement.
Once missives have been concluded, then the seller and purchaser are legally bound to sell and buy the property in the terms agreed, failing which they would likely face penalties or damages for breaching the
terms of the binding agreement.