Land Law: Option Agreements, Deed of Variation, and Easements

Running Head: LAND LAW
LAND LAW
Name of the Student
Name of the University
Author’s Note

LAND LAW1
Question:
Whether Rashid will be bound by any right or interest that Saleem or Malik may have on
the property and if they do, how to avoid it?
The issue in the case is whether Rashid will be bound by any right or interest that Saleem
or Malik may have.
The Land Registration Act 2002 has made it compulsory to register a land otherwise, at
the time of resale or mortgage, the physical title deeds of the land needs to be produced.
However, there is no specific time bound for the land registry. It can be done anytime. One need
not wait till the selling or mortgaging of land.
An Option Agreement is where the buyer is given exclusive rights to purchase a property
within a stipulated time as agreed upon by the parties. In general, terms, the property is secured
as an option without purchasing it. It, however, gives the buyer ample time to secure funds for
the property purchase with good price. However, the potential buyer is intended to pay a sum of
option fee to lock the property as a priority to him. Therefore, in an option agreement there are
two financial aspects, which are firstly the option fee paid to lock the property, and secondly, the
actual cost of the property to be paid to the seller by the buyer within the stipulated time.
However, the cost of the property is determined based on the value of the land pertaining at the
time of entering into the option agreement by the parties. In Teekay Tankers vs. STX Offshore &
Shipbuilding1, it was held by the Court that the key essential terms of the contract like the
delivery dates, or the price of the property should be agreed upon by the parties before entering
into the agreement. In absence of key essential terms of the contract, the court shall be discreet to
1 [2017] EWHC 253 (Comm)

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look into the implied terms and decide that the agreement shall not be binding to the parties even
if the parties had intended in full conscience for the agreement to be enforceable. However, to
avoid such discrepancies, in case of flexible terms, the parties should involve such provisions
into the contract, which while construing, does reflect upon the deciding of key essential terms of
the contract.
In an option agreement, the option holder stands with the alternative of option or choice.
The transactions in such contracts are unilateral as the interest of any one party is favored over
the other. However, in case where the contract has not been made or entered into by the parties,
the option shall not lie with the option holder only. The alternative or course of option shall also
lie with the other party negotiating its interest in the contract. Therefore, the interests of the
parties and their full discussions constitute the essence of the agreement, which is laid down in
the form of terms and conditions of the contract. The binding option, which ensures one party
with exclusive legal right of choice and the other with no choice, is the driving clause of such
option agreements. However, any option is not absolute in the lawful terms. Every option comes
with reasonable restrictions, which if not abided by, shall lead to breach of contracts. In other
words, even if every party has the right to choice or alternative as per their own wishes, but such
choice is subject to legal restrictions. There are certain option contracts, which are made illegal
in nature like those related to gambling and other unlawful activities. These contracts are not
made illegal due to the choice or the alternative of the party but the agreement in itself is held
unlawful and is not allowed to be enforced by law. Therefore, it is the driving factor of the
contractual duties and the mode of consideration that makes the agreement lawful or unlawful.
However, the choice does make the duty discharged or duty breached by the parties2.
2 Corbin, Arthur L. "Option Contracts." Yale LJ 23 (1913): 641.