Conditional Contracts – What Happens If One Side Doesn’t Deal With Their Obligations?

When a landowner wants to sell land for future development, they often enter into a conditional contract with a developer with the aim being that the sale completes (and they receive their money) when the developer has obtained planning permission.

These contracts are more complex than usual property sale contracts and set out what the developer needs to do and what needs to happen before the sale completes, the seller gets their money and the developer gets the land.

A recent case, Whitburn Estates Ltd v Thirteen Homes Ltd 2026 has discussed the obligations imposed in a conditional contract in detail. In fact the case is a very useful discussion of many aspects of contract law, conditions, how you terminate a contract, whether one party’s actions can mean they can no longer challenge something but this short article will just deal with one aspect:

What happens if you don’t comply with the obligations in a conditional contract?

Contracts were exchanged 28^th January 2022, there were two conditions required to be complied with in order for completion to occur. On exchange the developer paid a deposit of 10% and there was a deadline (subject to a bit of an extension in specified circumstances) of one year from exchange for compliance with the conditions. If the conditions were not complied with by 28^th January 2023 then either party could end the contract and the developer would have the deposit returned to it.

One condition was obtaining planning permission and the obligations in the contract required the developer to have submitted a planning application within 9 months;

The second condition was to do with a release of a restriction preventing change of use of part of the property – there was no particular timescale for this to be dealt with.

The developer delayed submitting the planning application whilst it was trying to resolve the second condition, it failed to make progress with the second condition, it never submitted a planning application, a year passed and it served a notice to end the contract and requested the return of the deposit.

In summary, the court held that the developer’s failure to comply with its obligation to apply for planning permission within 9 months was a breach of its obligations that it could not put right, as a result it was not entitled to serve notice to end the contract and the landowner was entitled to retain the 10% deposit.

The key takeaway from this dispute is that both landowners and developers need to take careful notice of all obligations imposed in conditional contracts and not just focus on the headlines. If you are a landowner or a developer with any questions then please get in touch with the Commercial Property team at Wilson Browne.