EFFECT OF EXCHANGE OF CONTRACT

These are –

1.     An equitable interest is vested in favour of the purchaser and a subsequent purchaser of the estate acquires it subject to the equity of the original purchaser.

2.     So long as the purchaser is not in default of the terms of the contract, he can prevent the transfer of his estate to a subsequent purchaser by way of action in court.

3.     He can also sue the vendor specifically to perform or complete the transfer.

4.     He can sue against voluntary waste, which depreciates the property.

5.     The purchaser can transfer his equity to another person.

6.     The vendor by implication is made a trustee of the purchaser in respect of the equity of the purchaser.

7.     Until completion, the vendor is entitled to the rents and profits on the land, though he must account to the purchaser.

8.     A lien is created in favour of the vendor over the property for payment of the balance by the purchaser.

9.     The death of one of the parties does not affect the contract.

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