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The bond clause: no due date = Dispute + Delay! |
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by
LawDotNews
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Published
2010/06/03 12:00:00 AM
(Viewed
659
times) |
If your property sale is subject to a suspensive condition (such as the buyer obtaining a bond), ensure that a specific time limit is clearly stated. Otherwise the buyer has by implication of law a “reasonable time” within which to obtain the bond – and, since you can’t start looking for another buyer until the existing sale has definitely lapsed, that’s a recipe for uncertainty, dispute, and costly delay.
What is or isn’t a “reasonable” period of time depends, per a recent High Court decision on
- The “peculiar circumstances” of each case, and
- Factors such as
- ;“...... the contemplation of each of the parties at the time of entering into the contract”,
- ;“...... any particular difficulty or cause of delay that might or did arise, if it was reasonably foreseeable”, and
- ;“...... the commercial interests of each of the parties.”
To illustrate – as a general rule 6 weeks may seem like plenty of time to get a bond, but in this particular case the seller was unable to convince the court that it was indeed enough, and lost the case.
Avoid all those grey areas – sign nothing until your attorney has vetted your sale agreement for both certainty and enforceability!
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