Commercial Contracts Law Notes
Discussion Question 1.
On 1 Jan 2009 a V and P entered a standard form contract for sale of property in SYD, with special condition that the “sale is subject to P completing the sale of his existing home in Brisbane by 1 June 2009” but no time for completion is specified and clause 29 of 2005 Standard Form is deleted.
(Standard Form: completed with in 42 days of existing contract/ exchange of contract? Hence the qtn scenario means it’ll be deleted.)
Is there a binding contract for SYD before this BNE condition is fulfilled? (Can be condition BEFORE duty to perform obligation of the SYD sale, or the main obligation is conditional on the smaller obligation, condition precedent to the duty to PERFORM the actual contract)
(1) Is the condition a condition precedent to the existence of a binding contract for the purchase of the Sydney property?
No, intended to be binding before condition fulfilled, something to occur until the MAIN obligation’s due. It’s a condition precedent to PERFORMANCE of the main contract (also referred to as condition subsequent).
(2) When does the P come under a duty of immediate performance of his promise to pay the balance of the purchaser money in respect of the Sydney property?
When BNE sold (contingent condition) and after a reasonable time/ tendering the price for the house (concurrent condition), duty of immediate performance that the other party tenders.
(3) Would the P have given any promise concerning fulfilment of the condition regarding the Brisbane sale?
YES, most contingent conditions are, to some degree, within the control of the party(-ies). Business efficacy means one should imply the term in the contract that both parties, with reasonable expectations, would do what is necessary to allow the contract come to fruition. What is a reasonable effort: construed at the time of contract construction. (E.g. fulfilment of contingent condition could be fetching a reasonable price for BNE property)
(4)
On 1 Jan 2009 a V and P entered a standard form contract for sale of property in SYD, with special condition that the “sale is subject to P completing the sale of his existing home in Brisbane by 1 June 2009” but no time for completion is specified and clause 29 of 2005 Standard Form is deleted.
(Standard Form: completed with in 42 days of existing contract/ exchange of contract? Hence the qtn scenario means it’ll be deleted.)
Is there a binding contract for SYD before this BNE condition is fulfilled? (Can be condition BEFORE duty to perform obligation of the SYD sale, or the main obligation is conditional on the smaller obligation, condition precedent to the duty to PERFORM the actual contract)
(1) Is the condition a condition precedent to the existence of a binding contract for the purchase of the Sydney property?
No, intended to be binding before condition fulfilled, something to occur until the MAIN obligation’s due. It’s a condition precedent to PERFORMANCE of the main contract (also referred to as condition subsequent).
(2) When does the P come under a duty of immediate performance of his promise to pay the balance of the purchaser money in respect of the Sydney property?
When BNE sold (contingent condition) and after a reasonable time/ tendering the price for the house (concurrent condition), duty of immediate performance that the other party tenders.
(3) Would the P have given any promise concerning fulfilment of the condition regarding the Brisbane sale?
YES, most contingent conditions are, to some degree, within the control of the party(-ies). Business efficacy means one should imply the term in the contract that both parties, with reasonable expectations, would do what is necessary to allow the contract come to fruition. What is a reasonable effort: construed at the time of contract construction. (E.g. fulfilment of contingent condition could be fetching a reasonable price for BNE property)
(4)