The contracts

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This fact sheet is general information only. If you need a lawyer, try LawMatch™ a free service that matches you with a lawyer who meets your legal needs and preferences.

Receiving an offer

Often an agent will ask a buyer for a deposit before telling you that an offer has been made. Of course, if a successful bid is made at an auction, the deposit will be paid immediately following the auction.

What do I receive?

If the agent thinks the offer is worth sending to you, the prospective buyer will usually be asked to pay a deposit (or an amount of money less than the deposit) and sign a legal document that indicates their intention to offer e.g. a formal contract, Contract Note, Offer and Acceptance, Offer to Purchase (or similar).

The procedure is different at an auction. The successful bidder will usually be asked to pay a 10% deposit and sign the contract of sale.

Is an offer binding?

Many buyers think that a formal offer communicated to the vendor e.g. Contract Note (or similar), is nothing more than an indication that their offer is serious. Once you accept the offer it may in fact be legally binding, although there may be a cooling-off period.

What's in a contract?

A contract, whether a formal Contract of Sale or Offer, will contain a combination of some of these terms:

• The name and address of the seller.
• Detailed description of the physical dimensions of the land.
• A space that allows the chattels to be listed. Chattels are things not attached to the house, such as curtains. Fixtures are things like light fittings that are part of the building.
• The purchase price, which is divided into the deposit and the balance. The deposit is usually 10% of the purchase price, but the agent will often ask the buyer for a smaller amount of money when they sign the Contract Note (or similar). Remember, this may not make the preliminary offer (e.g. Contract Note, Offer and Acceptance, Offer to Purchase) any less binding.
• Settlement details.
• Building inspection reports.
• The contract can be "Subject to..." a particular condition e.g. it may refer to tenancies that will continue after settlement. If there is a tenancy, you will not get vacant possession until the end of the tenancy. If the property is not sold with vacant possession, don't sign until you get legal advice.
• The contract may contain information about a "cooling-off period". This should be read very carefully. For more information see our Cooling-off period fact sheet.

General Conditions

General Conditions are written in the standard Contract of Sale. They cover issues such as:

• loss or damage before settlement;
• what happens if there is a breach of the contract;
• how money is paid, etc.

Special conditions

These are extra conditions that are put in the contract by you or the buyer. They can be about anything to do with the property. For example:

• that the contract is subject to the buyer obtaining finance;
• that there will be penalties for a delay in the settlement;
• that the sale is subject to a tenancy etc.