SQE1 sample questions

Question 56

A woman is buying a freehold property. She chose the property because it included a large detached garage which would be ideal for storing her collection of five vintage cars.

Contracts incorporating the Standard Conditions of Sale (Fifth Edition - 2018 Revision) (SCS), unamended, were exchanged last week. The woman has discovered that there was a fire at the property last night. Although the house is unaffected the garage has been destroyed. The woman is uncertain whether she wishes to proceed with the purchase because the garage will take six months to rebuild. She is concerned about any additional costs this might involve and does not know where her cars will be stored in the interim.

The woman asks her solicitor for advice.

What should the solicitor advise the woman?

A. She is contractually bound to complete the purchase. There will be no reduction in the purchase price because the risk passed to her on exchange.

B. She cannot be compelled to complete the purchase as an important part of the subject matter of the contract has been destroyed.

C. She is contractually bound to complete the purchase. The SCS required the woman to purchase a policy of insurance and she must use any proceeds to reinstate the garage.

D. She is contractually bound to complete the purchase. The risk remains with the seller who must reinstate the garage in order to fulfil his obligations under the contract.

E. She can decide whether or not she will proceed. If she does proceed, she can require the seller to reinstate the garage to the condition it was in at the date of the contract.