Which formula will be used to exchange contracts on The Willows in a linked transaction?

• A. Formula A
• B. Formula B
• C. Formula C
• D. Formula D

Answer: (C)

In a linked transaction the way you exchange contracts must preserve the overall financial position of both parties across the interlinked deals. The formula chosen at exchange determines how the price, deposits and any adjustments are allocated between the two contracts so that, whatever happens when each part completes, neither side gains or loses unfairly because of timing or the interdependence of the sales.

For The Willows scenario, the right formula is the one that balances the two contracts so the total consideration and liabilities line up correctly as the linked deals unfold. It ensures that when one part completes, the financial effect on the other is handled in a way that keeps the overall position fair and consistent with the agreed structure of the transaction. That matching mechanism is why this option is the best fit.

Other formulas would not provide that same balance across the linked contracts; they could create misalignment in the net position, risking over- or under-payment or double liability if the timing of completions shifts.