Due to the commercial imperatives of property dealings, parties
may try to 'lock' in an agreement by signing letters of
offer or heads of agreement. In a strong competitive property
market, contracts may also be signed and exchanged via email. While
each case will depend on its circumstances, there are a number of
'rules of thumb' that property developers and investors
should keep in mind when trying to secure a transaction under a
'pre-contract' arrangement:
DON'T ASSUME THAT INFORMAL AGREEMENTS ARE BINDING EVEN IF
THEY SAY THEY ARE:
There is a presumption by the Courts that such informal
arrangements are not binding. They will often not comply with
specific State-based property law requirements such as mandatory
disclosure, which may give rise to rescission rights. If you wish
to lock in a deal, then don't count on your informal
arrangement to be legally binding.
