ADVANTAGES OF FORMAL CONTRACTS

1.      A formal contract affords the purchaser the opportunity to investigate the title of the vendor thoroughly before executing the Deed of Assignment. This opportunity is needed especially in cases where large sums are involved.
2.      By the special condition in the Contract of Sale, the parties make their position clear; they are not relying on implied terms so they can avoid litigation. 
3.      Since both parties are bound by the contract it prevents last minute withdrawal by either of the parties. 
4.      It prevents gazumping. This means the vendor can’t increase the price after the contract of sale has been signed. 
5.      Taking possession of the land is possible after a contract of sale has been made notwithstanding that the contract hasn’t been concluded. 
6.      The equitable doctrine of conversion is applicable here. This is because equity looks upon that as done which ought to be done. 
7.      It paves way for pecuniary benefit for conveyancers to charge separate fees for both the contract of sale and Deed of Assignment.

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