Describe the consequence of exchange in The Willows linked transaction.

• A. The sale is binding only on completion
• B. The contracts are binding on both the exchange and completion dates
• C. Exchanges have no binding effect
• D. The contracts are cancelled

Answer: (B)

In linked property transactions, the key idea is that exchange of contracts creates binding obligations for both sides, and in a Willows-type linked arrangement that binding covers the entire linked set of contracts and lasts until the completion date. Once the contracts are exchanged, each side is legally committed to the deal, and in a linked transaction the obligation to complete is tied to the specified completion date. That means the contracts are binding from the exchange date and also require performance by the completion date, so either party who tries to back out could face breach and damages or be compelled to complete. This is why the best answer states that the contracts are binding on both the exchange and completion dates. The other options misstate when binding starts or what happens to the contracts—binding does not wait until completion alone, it begins at exchange, there is binding effect, and the contracts aren’t cancelled merely by exchange.