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Completion Dates; Conditional vs. Actual

The recent case of British Overseas Bank Nominees Limited v Analytical Properties Limited [2015] EWCA Civ 43 serves as a useful reminder of the importance of all parties understanding the completion date ensuring that it is clear and unambiguous.
The case concerned a contract for the sale of a shopping centre in Windsor. Completion was conditional upon the satisfaction of pre-conditions, including providing certificates in respect of emergency lighting.
A contractual completion date was specified to be 17 December 2013, but provisions were made in clause 37 that the certificates were to be provided “as soon as practicable and in any event prior to the date of actual completion.” However, the certificates were not provided until after the stipulated contractual completion date, 17 January 2014, but completion on the contractual date was not insisted upon.
The question was whether actual completion meant the contractual completion date, or the date on which completion in fact occurred.
At first instance the judge found that actual completion meant the contractual completion date and that even though the seller had not provided the certificates by the contractual completion date, they were not released from this obligation and should have carried on with its endeavours to obtain the certificates.
However, the seller then appealed this and, reversing the decision of the judge at first instance, the Court of Appeal agreed with the seller that the term actual completion meant the date on which completion took place, which could and was after the contractual date stipulated.
The distinction was made at the Court of Appeal between a condition that was to be satisfied before completion and a condition to be satisfied before the contract comes into effect. It was clear that both parties intended the condition of providing certificates for the emergency lighting was to be satisfied before completion took place irrespective as to whether this was after the contractual completion date. Therefore, there was no breach of contract as actual completion within clause 37 was interpreted to mean the date on which completion took place.
The Court of Appeal also found that the buyer could have insisted on completion on the contractual completion date or waived their reliance on clause 37. However, the buyers did neither resulting on the clause becoming conditional and the seller not being in breach of their obligation to complete.
This case highlights the importance of careful drafting of the completion date and pre-conditions for completion. Had the parties both understood the implication of adding such a clause then perhaps costly court proceedings could have been avoided.
For further information please contact Tom Warrender.