Section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989 prevents parties from being bound by informal contracts to buy and sell land. However, section 2(5) excepts implied, resulting and constructive trusts from these requirements and, in cases where justice demanded it, the courts were sometimes persuaded to use the doctrine of proprietary estoppel to impose a constructive trust in order to sidestep the requirements of section 2. The House of Lords’ decision in Yeoman’s Row Management Ltd v Cobbe [2008] UKHL 55 has restricted such claims, but Dowding v Matchmove Ltd [2016] EWCA Civ 1233; [2016] PLSCS 341 reminds us that the precise boundaries of the proprietary estoppel/constructive trust exception to section 2 have yet to be settled. The case concerned an oral agreement between friends for the sale of a building plot and meadow. In due course, the parties entered into a written contract for the sale of the building plot – but not the meadow, pending resolution of a dispute about a right of way. In due course, the buyers completed the purchase of the building plot and paid the entirety of the price for both parcels of land. But the parties fell out and the company sent the buyers a cheque for £40,000, representing half the price of the meadow, stating that the buyers could only have half of it. Was the oral agreement between the parties enforceable on the ground that there was a proprietary estoppel and/or constructive trust? The trial judge based his decision in favour of the buyers on both doctrines. However, the buyers chose to rely solely on constructive trust on appeal, thereby avoiding the difficult issue of whether section 2(5) of the 1989 Act can apply to claims based on proprietary estoppel, as distinct from constructive trust. The Court of Appeal explained that Cobbe was a case in which the parties reached an agreement in principle but intended to conclude a formal agreement, where further terms remained to be agreed and the parties did not regard the agreement in principle as immediately legally binding. Therefore, there had been no constructive trust on which section 2(5) of the 1989 Act could bite. A constructive trust based on the common intention of the parties can arise where there is an express agreement between parties as to the ownership of property, on which one party relies to his detriment, such that it would be unconscionable for the other party to deny his ownership. The parties in this case had concluded what they regarded as an immediately binding agreement, which was complete in all its essential terms, and had acted on it. They had treated section 2 as “a mere technicality”. The buyers had paid a substantial deposit and had been allowed to begin construction work before exchanging contracts to buy the building plot. The buyers had also acted to their detriment by selling their previous home and by completing the purchase of, and moving into, their new house. They had spent time and money erecting stabling on, and fencing, the meadow, and had contributed to the cost of dealing with the right of way dispute. Therefore, the company held the meadow on constructive trust for the buyers, which meant that the case did fall within section 2(5).   Allyson Colby is a property law consultant