A contract race arises when a seller pursues a sale with more than one prospective buyer at the same time. For law students, the central professional-conduct problem is how the seller’s solicitor can follow instructions while avoiding misleading buyers and protecting the client’s confidential information.
The SRA Standards and Regulations introduced in November 2019 are no longer “new”. When answering a current problem, use the current rules and apply them to the solicitor’s conduct, rather than looking for a single rule labelled “contract races”. This guide concerns solicitors regulated by the SRA in England and Wales.
What happens in a contract race?
Imagine that a seller has agreed a price with Buyer A, subject to contract. Before exchange, Buyer B offers to proceed more quickly. The seller asks their solicitor to progress both transactions.
Preparing documents or announcing readiness to exchange is not itself the same as exchanging binding contracts. A land-sale contract must satisfy the applicable formalities, including those in section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. The terms and stage of the transaction matter.
Check whether there is already a binding contract, an exclusivity arrangement or an undertaking. A seller cannot assume that every pre-completion stage leaves them free to proceed however they wish.
Which SRA duties matter?
Several duties may operate together:
- Honesty and integrity: Principles 4 and 5 require both.
- The client’s interests: Principle 7 requires acting in each client’s best interests, but the Principles recognise that public-interest obligations take priority where they conflict with an individual client’s interests.
- No misleading conduct: paragraph 1.4 covers misleading others through acts or omissions, including complicity in a client’s conduct.
- Confidentiality: paragraph 6.3 protects current and former clients’ affairs unless disclosure is required or permitted by law or the client consents.
Read the SRA Principles and Code of Conduct together.
That combination explains why “the client told me to” is not a complete answer. It also explains why the solicitor should not simply disclose confidential information without considering the basis for doing so.
How should the solicitor approach disclosure?
In a contract race, the professional-conduct concern is that buyers may continue incurring costs under a false impression that they are the only party being progressed. The practical application of the duties above is to explain the position to the seller and obtain consent to tell the prospective buyers or their solicitors about the competing transaction.
Agree what needs to be disclosed. Informing someone that a competing buyer exists does not automatically justify sharing that buyer’s identity, offer details or other confidential information. The SRA’s confidentiality guidance explains that consent should be clear about the information, recipient and purpose.
If the seller refuses consent, the solicitor must not solve the problem by silently continuing conduct that misleads another party. They should explain the conflict, seek appropriate compliance advice and consider whether they must cease acting. Nor should withdrawal become a device for disclosing confidential details indirectly.
This is an application of broader duties to the scenario, not a claim that the current Code contains a standalone contract-race procedure.
Worked example: “Do not tell Buyer A”
Facts: Buyer A’s solicitor asks whether another buyer is being progressed. The seller has instructed their solicitor to send papers to Buyer B, but says: “Tell A they are the only buyer. I do not want them to pull out.”
Issue: The instruction asks the solicitor to give a statement they know is false.
Analysis: The solicitor cannot give that answer. They should explain the duties to the client and seek consent to communicate the true position appropriately. The client’s commercial preference does not remove the prohibition on misleading conduct. At the same time, the solicitor must handle confidential information properly.
Next step: If the client persists, the solicitor needs to address whether continued representation is possible. A good exam answer identifies both duties and explains why neither lying nor an unconsidered disclosure is an acceptable shortcut.
Now change the facts: Buyer A has not asked a direct question. The omission issue still matters. Silence can mislead, depending on what has been said and the impression the solicitor is allowing to continue.
What if the firm acts for competing buyers?
That raises a separate conflict-of-interest issue. Do not assume separate fee earners or an informal agreement solve it. Apply the conflict rules and their conditions to the actual instructions. The SRA’s conflicts guidance discusses clients competing for the same asset and the limits on acting.
Keep this distinct from a seller’s solicitor dealing with buyers represented by other firms. The parties, retainers and information held are different.
How to structure an exam answer
Identify the client, the stage of the transaction and the instruction causing difficulty. Apply the relevant duties, then propose a practical next step. Address any existing contract or undertaking separately.
For preparation across your subjects, Law Answered+ gives you access to all our revision guides and casebooks covering the full syllabus, with MCQ Master included. Use the property and professional-conduct material for this topic, then move to the rest of your revision within the same membership. MCQ Master includes ethics and professional-conduct questions to test whether you can recognise the same duties in a different scenario.