Contract Validity

Discussion in 'The Buying & Selling Process' started by DueDiligence, 27th Jan, 2020.

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  1. DueDiligence

    DueDiligence Well-Known Member

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    Hi there,

    Would like to tap into the knowledge here and get some advice on what you guys think about this one.

    Hypothetical Scenario

    A buyer submits a signed contract to the agent who then presents it to the vendor. The vendor in the evaluation process doesn't accept it and the buyer is informed their contract is not the preferred offer. The vendor some time later changes their mind and prefers this original offer.Can they then re-sign this document if they still have it in their possession and make it binding, or is it considered cancelled?

    To put this another way, does acknowledgement of the contract being rejected (by the seller) to the buyer) make the contract legally void?

    Thanks

    D.
     
  2. noomi_nooma

    noomi_nooma Well-Known Member

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    Need to exchange signed contracts for it to be binding
     
  3. DueDiligence

    DueDiligence Well-Known Member

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    Exchange, as in two signed documents?
     
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    What state?

    If you make an offer and it is accepted then that is the definition of a contract being entered. Contracts for land are only enforceable if in writing of which your signed contract is. However if you withdrew your offer before accepted there is no contract
     
  5. Trainee

    Trainee Well-Known Member

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    Prevention is better than the cure here. Dont give the seller the opportunity to sit on a signed contract.
     
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  6. wylie

    wylie Moderator Staff Member

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    Withdraw the contract in writing.
     
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  7. Shogun

    Shogun Well-Known Member

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    If you sign/make an offer. Put a time limit on it (expires by this time if not accepted, this offer is good until 3pm on this date) and acceptance must be communicated by whatever form you like.

    yes why you get it in writing as an extra protection.
     
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  8. DueDiligence

    DueDiligence Well-Known Member

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    So upon being notified the proposal is not preferred, request in writing that it becomes expired?
     
  9. DueDiligence

    DueDiligence Well-Known Member

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    So you're suggesting that a condition be added into the contract stating ïf the submission is rejected it becomes void" or something similar?
     
  10. wylie

    wylie Moderator Staff Member

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    I know when we wanted to withdraw a contract we'd signed as vendors, because the (lawyer) purchaser was mucking us about, not signing, stringing us along, we asked the agent to rip the contract up, but just in case, we also had him email the purchaser. The agent was holding the contract, so I doubt there was any way that purchaser could sign it anyway to make it a binding contract, but we wanted to be sure (as @Terry_w has mentioned up above).

    Edit: I'm guessing in some cases, a signed contract could have been sent electronically, so withdrawing in writing (email I think would suffice - but check this for sure), means there's no way the other party can sign the contract, which they could do if you don't ensure you've withdrawn the contract.
     
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  11. thatbum

    thatbum Well-Known Member

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    The legal answer is "maybe".
     
  12. Shogun

    Shogun Well-Known Member

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    Business Law 101 was years ago.
    This offer is good until this time date. After that it expires.
    Acceptance must be communicated. So if you don't hear by that time date then no contract. You can specify form of acceptance ie carrier pigeon.
    Offers can be withdrawn by you before acceptance. So if you don't hear then withdraw offer Ie via email or phone , best in writing
     
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  13. Trainee

    Trainee Well-Known Member

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    The expiry would be put in the offer, but not necessarily written into the contract itself.

    Putting it another way, do the lawyers have examples of where the seller 'ignores' an offer expiry and tries to exchange / enforce a contract by signing after the offer expired?

    Dont really imagine the agent would want to play this sort of game, since it would be challenged and the agent wouldnt get paid.
     
  14. DueDiligence

    DueDiligence Well-Known Member

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    If I understand this right, you had a contract presented to you by the buyer that was not signed by them, you signed it but then cancelled it before they could. Doesn't the contract normally get presented to the vendor pre- signed by the buyer?
     
  15. DueDiligence

    DueDiligence Well-Known Member

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    One in NSW , the other in QLD
     
  16. Trainee

    Trainee Well-Known Member

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    Which side are you sitting on? Seller or buyer? And what are you trying to achieve?

    If you are a seller and want to know when you can shop an offer to other potential buyers or want to know how to keep an offer in reserve, just come right out and say it.
     
  17. DueDiligence

    DueDiligence Well-Known Member

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    Buyer , contract signed upon submission.

    I just want to know how long its valid for and what the vendor can do with it if (legally) if they first refuse it but still have it and change their mind.
     
  18. The Y-man

    The Y-man Moderator Staff Member

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    If it doesn't say on the contract - it's open forever.
    In Vic, you could crash it based on cooling off (less a fee) even after the vendor has accepted.

    Normally in Vic we sign the contract with an expiry date (typically 3 biz days) for the vendor to consider and sign.

    The Y-man
     
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  19. DueDiligence

    DueDiligence Well-Known Member

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    I could request in writing any time though to withdraw the contract though?
     
  20. wylie

    wylie Moderator Staff Member

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    From memory purchaser signed a contract, we countersigned with a higher price, and he started playing smart games, getting our agent over to his place but saying "I might sign it tonight, I might not". So I do believe we had countersigned, and had he initialled our counter price, it would have been a binding contract.

    We wanted to pull out rather than play games, so had the agent email (from memory) that we were withdrawing the contract before he initialled our counter offer. That's my memory of it anyway.