Informal agreements for the sale of land or property can be well nigh impossible to enforce, according to Birmingham solicitors Williamson and Soden.
A recent case illustrates just how difficult it can be to persuade the courts to agree.
"For a long time now, contracts governing the sale of land and buildings have had to meet more stringent requirements," said associate and commercial property special-ist Louisa Jakeman.
"It is not possible, for example, to force someone to buy or sell purely on the basis of a verbal agreement and a handshake."
For a land sale contract to be binding, legislation requires that it must be signed in writing incorporating "all the terms which the parties have expressly agreed" and it is for this reason that the expression "sold, subject to contract" has arisen.
In a recent case, an investor leafleted several properties inviting the owners to contact him if they were interested in selling.
One flatowner did get in touch, the two parties met and the investor recorded the terms of an alleged agreement in his notebook, agreeing to buy the property for £25,000.
Investor and owner both signed and the investor paid a deposit of £240.
Solicitors were later instructed but after several weeks of correspondence, much of it on a "subject to contract" basis, it was made clear the owner was not prepared to sell at that price because the flat was worth more.
The investor duly took the matter to court, arguing that the two pages from his notebook which had been signed at the meeting were an enforceable agreement and the owner was therefore obliged to sell for £25,000.
The court dismissed this line of reasoning, ruling that neither page amounted to a "contract" as each did not state that the seller was willing to sell and the buyer had agreed to buy.
Even if its view on that point was wrong, the court maintained there was no contract because an agreed term relating to completion within one week subject to satisfactory searches had not been incorporated.
"This case is a prime example of how courts will resist allowing informal agreements for the sale of land and buildings to be enforced," added Mrs Jakeman.
"It underlines that parties must understand a sale is not achieved until contracts are signed and exchanged."
Although it is not uncommon for developers and investors to approach property owners to see if they can strike a deal, Mrs Jakeman says the only way to be certain that a meeting will result in a binding agreement is to take along a properly drawn agreement prepared by a solicitor and follow the instructions precisely.
Preferably, solicitors for both parties should be at such meetings to ensure a valid exchange can take place.