Fact 9. Draft Contracts. Why are they important? They outline the terms of sale and are reviewed thoroughly by conveyancers to protect clients’ interests before exchange.
When buying or selling a property, few documents carry as much legal and practical importance as the draft contract. These contracts outline the agreed terms of a sale, including essential details such as price, property boundaries, completion dates, and conditions of transfer. In conveyancing, draft contracts bridge the negotiation stage and the formal legal commitment known as the exchange of contracts. Their preparation, review, and approval are central to protecting clients’ interests and ensuring the entire transaction complies with UK property law.
We explore what draft contracts are, their importance in conveyancing, what they include, how conveyancers review and negotiate them, and the key risks they help prevent. The article also details the buyer’s and seller’s respective roles, the documentation involved, and why professional legal review is indispensable before exchange.
What Is a Draft Contract in Conveyancing?
A draft contract is a preliminary version of the property sale agreement, prepared by the seller’s conveyancer and sent to the buyer’s conveyancer for review. It forms the legal foundation of the property transaction and records every term that will later be made legally binding upon exchange of contracts.
The draft contract is not yet enforceable—it is subject to negotiation and amendment until both parties are satisfied with the conditions. Once reviewed and agreed upon, the final version becomes the official contract of sale.
Why Draft Contracts Are Essential
Draft contracts are crucial for several reasons:
• They provide a legal framework that defines the sale terms.
• They identify each party’s obligations before and after completion.
• They confirm that both buyer and seller understand the same deal details.
• They protect against misinterpretation, omissions, and legal disputes.
• They give each party’s conveyancer a chance to raise enquiries and correct inaccuracies before contracts are exchanged.
Without careful scrutiny of the draft contract, buyers risk inheriting undisclosed liabilities or misunderstandings, while sellers may expose themselves to future disputes or possible financial loss.
Who Prepares and Reviews the Draft Contract?
Seller’s Conveyancer:
The seller’s conveyancer prepares the draft contract and an accompanying contract pack, which typically includes:
• A copy of the property’s official title from HM Land Registry.
• The Property Information Form (TA6) outlining known details and issues related to the property.
• The Fixtures and Fittings Form (TA10) detailing what items are included or excluded from the sale.
• The Energy Performance Certificate (EPC).
• Any warranties or planning permissions relevant to the property.
Buyer’s Conveyancer:
Once received, the buyer’s conveyancer thoroughly reviews the draft contract. This review process involves:
• Checking that all documents are accurate and complete.
• Ensuring the title is free from defects, restrictions, or encumbrances.
• Comparing agreed buyer-seller terms with lender and client expectations.
• Raising pre-contract enquiries to clarify details or resolve concerns before exchange.
• Negotiating necessary amendments to terms, dates, or conditions.
The buyer’s conveyancer acts as the client’s safeguard, ensuring no clause exposes them to avoidable risk.
What Information Does a Draft Contract Contain?
A typical draft contract will clarify every key aspect of the sale, including:
• Names and details of buyer and seller
• Description of the property and its title number.
• Agreed sale price and deposit percentage.
• Completion date and conditions of payment.
• List of fixtures, fittings, and contents included or excluded from the sale.
• Special conditions agreed between parties.
• Reference to standard conditions of sale, often derived from the Law Society’s General Conditions.
• Deposit handling terms and consequences of default.
• Conditions relating to mortgaged properties, leaseholds, or new builds if relevant.
Conveyancers review every clause to ensure terms are fair, lawful, and reflect the practical reality of negotiations.
How Conveyancers Review and Negotiate Draft Contracts
The review process is detailed, technical, and vital to the protection of client interests. The buyer’s conveyancer ensures the draft contract aligns with law and client expectations by addressing potential risks early.
Typical tasks include:
• Checking the legal title against the Land Registry to confirm authenticity and ownership.
• Confirming any mortgage or legal charge on the property will be cleared before completion.
• Ensuring there are no restrictive clauses, covenants, or easements that limit property use.
• Verifying all planning permissions and building regulation approvals are in order.
• Reviewing leasehold terms such as ground rent, service charges, and management agreements (if applicable).
• Cross-referencing property boundaries and rights of access.
• Examining completion timeline and ensuring deposit terms protect the buyer.
• Requesting clarification on irregularities, such as unregistered property or structural alterations.
Once issues are identified, the conveyancer negotiates amendments with the seller’s conveyancer before proceeding to exchange.
Pre-Contract Enquiries
During the review, the buyer’s conveyancer raises pre-contract enquiries based on observations from the draft contract and searches.
These questions often relate to:
• Boundaries, rights of way, and shared access.
• Disputes with neighbours or boundary concerns.
• Building work, extensions, or planning breaches.
• Drainage, water, and environmental risks.
• Road access, maintenance responsibilities, and utilities.
Pre-contract enquiries allow unresolved issues to be clarified and recorded before the parties are legally bound.
The Importance of Protecting Clients’ Interests
Conveyancers act as legal protectors, ensuring their clients do not consent to contracts exposing them to foreseeable problems. They assess not only the wording but the broader legal implications of each clause.
For example:
• If completion terms are unrealistic, they negotiate an adjusted date.
• If a restrictive covenant limits property use (e.g., banning business activity), the buyer must be informed.
• If planning documentation reveals non-compliance, they insist the seller regularises it.
• If a leasehold agreement lacks necessary management or repair details, further documents are required.
A carefully reviewed contract ensures the property purchase or sale is legally watertight and accurately reflects the agreed terms.
Risks of Not Reviewing the Draft Contract Properly
Failing to review or understand a draft contract can lead to severe complications such as:
• Financial disputes over incomplete or inaccurate details.
• Legal liability for limitations on property use.
• Delays or cancellations due to unresolved defects in title or planning.
• Unexpected costs, such as service charges or covenant breaches.
• Broken chains, where one party pulls out because contract terms were unclear.
Because contracts become legally binding upon exchange, resolving all issues before that point is critical. Once exchanged, withdrawal usually results in substantial financial penalties.
Major Points: Why Draft Contracts Matter in Conveyancing
• Define every term of sale, ensuring both parties agree on identical terms.
• Legally safeguard buyers and sellers against contractual misunderstandings.
• Identify risks in property title, boundaries, or planning histories before exchange.
• Clarify obligations on fixtures, fittings, completion, and deposit.
• Help conveyancers raise key pre-contract enquiries.
• Inform lenders of property compliance and suitability for mortgage security.
• Enable stress-free completion once exchanged.
The Exchange of Contracts: The Outcome of the Drafting Process
Once both conveyancers are satisfied with the draft contract, and all enquiries are resolved:
1. Final versions of the contract are prepared.
2. Both parties sign identical copies.
3. Contracts are exchanged, typically by phone between solicitors, confirming mutual commitment.
4. The buyer pays the deposit (usually 10% of purchase price).
5. A set completion date becomes fixed—legal ownership will transfer on this date.
This exchange shifts the transaction from “subject to contract” to a legally binding agreement. After exchange, neither party can withdraw without serious financial implications.
The Legal Framework Governing Draft Contracts
Conveyancing contracts follow standard models defined by the Law Society’s Standard Conditions of Sale. However, sellers can insert additional special conditions.
Conveyancers must check these additions carefully to ensure they do not unfairly disadvantage their clients.
Regulatory frameworks influencing the drafting and review process include:
• Land Registration Act 2002: Governs the registration of property interests.
• Law Society Conveyancing Protocol: Specifies best practices for solicitors managing residential property sales.
• Consumer Protection from Unfair Trading Regulations 2008: Ensures the seller discloses relevant property defects honestly.
• Money Laundering Regulations 2017: Enforces client identity and funds verification.
These guidelines define how conveyancers operate during contract preparation and review, ensuring compliance and fairness.
Efficiency and Modern Practice
Technology increasingly supports the contract process. Many law firms now use secure portals for digital contract exchange to reduce delays, with electronic signatures and e-conveyancing tools enhancing speed and transparency. Buyers and sellers can track progress and view document changes online, improving confidence and efficiency.
However, skilled conveyancer oversight remains essential—automated systems cannot replace legal interpretation and the human judgment required to ensure contractual fairness.
Draft contracts are an indispensable element of property conveyancing. They define every term, condition, and expectation between buyers and sellers before legal commitment. Without thorough review and negotiation by trained conveyancers, contracts could contain errors or omissions that lead to disputes, financial loss, or unsuccessful transactions.
