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ARTICLE · 29 MAY 2009

Warning: Offer Signed Subject To Contract May Still Be Binding

Barry Nilsson
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The Court of Appeal has recently handed down a decision that, while not a new statement of law, is a re-statement of a principle that serves as a reminder to parties to an agreement for the sale of land; the signing of an offer to sell or buy property may be binding, even if it is subject to the execution of a formal contract.

AustraliaReal Estate and Construction
Cameron Graham
Cameron Graham
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Originally Published 21st April 2009

The Court of Appeal has recently handed down a decision that, while not a new statement of law, is a re-statement of a principle that serves as a reminder to parties to an agreement for the sale of land; the signing of an offer to sell or buy property may be binding, even if it is subject to the execution of a formal contract.

What happened?

The plaintiff seller owned 20 acres of rural/residential land on the Sunshine Coast. Following negotiations between the seller and the defendant buyer over a 12-month period, in April 2008 there arose a dispute as to whether, under put and call option arrangements, the seller had made a binding agreement with respect to the sale of the land to the buyer. The court at first instance determined the dispute in the buyer's favour, declaring that a letter dated 8 April 2008 (the Letter) signed by both parties constituted a valid and binding agreement. The court ordered that the agreement be

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