ARE YOUR SPECIAL CONDITIONS CLEAR AND CONCISE WHEN BUYING BRISBANE INVESTMENT PROPERTY OR REAL ESTATE PROPERTY
A decision handed down in the Queensland Supreme Court raises awareness for both buyers and sellers of investment property in Brisbane, Queensland to ensure that clear and concise language is used in purchase or sale contracts.
In a 2003 case, a contract of sale was entered into for the purchase of a house. Settlement was due to be effected on 24 April 2003.
The contract, however, had a special condition stating that the "contract was conditional upon the completion of the sale of the buyer's house on or before 26 March 2004." If the condition was not satisfied, without default, by the buyer, the contract would end and all deposit monies paid would be refunded.
The sellers sent a fax to the buyers on 26 March. On 27 March the buyers sent a fax stating "settlement had been extended to 24 April to coincide with the completion of the matter".
The sellers purported to terminate the contract on the basis that the special condition had been satisfied by the due date.
The special condition was for the benefit of the buyer therefore the buyer was entitled to waive the condition up until March 26 and at any time prior to termination by the seller (for non-fulfilment of the condition). If the special condition was not satisfied by 26 March, the condition then became one for the benefit of both parties.
The issue was whether the fax of 27 March constituted a waiver by the buyer of the special condition, ie. Was the fax consistent with the buyer intending to complete and waiving it's right to rely on the special condition to terminate if it's own sale did not settle.
The Judge made his decision and it was held that the reference to "completion of this matter" was an unequivocal statement that the buyer intended to complete the contract. This statement and the statement that the special condition had not been fulfilled constituted an effective waiver of the special condition.
The Buyer can waive the benefit of a special condition but cannot unilaterally vary the special condition.
His Honour also concluded that the seller cannot terminate the contract, and as a result, the contract was enforceable against the seller.
This example clearly demonstrates the importance of having your contract of sale reviewed prior to your signing it, to ensure that clear, concise language is used and also to ensure that your interests are protected at all times.
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