A reader has approached our experts about a potential problem involving an offer to purchase on a fixed property that was subject to a suspensive condition.
The reader says the contract was written using language too difficult for him to understand easily and that he asked the agent for the same contract but in simpler language. However, to secure the property, he signed the agreement.
He explains that the suspensive condition was not fulfilled and he thus expected that the agreement had lapsed. Regardless, the seller’s agent has been calling him and mentioned the drawing up of the transfer documentation.
See the reader’s question here.
It is unclear whether the successful granting of a mortgage bond is the suspensive condition in question.
But it appears that the seller’s agent has approached a bond originator to assist the buyer in securing a bond for the purchase of the property. According to the reader, however, he specified that he would use his own banker for securing the bond.
It is unclear whether the bond acquisition clause was worded in such a way that only the purchaser may apply for the finance or whether the agent could do so on his behalf.
It is not uncommon to allow for the seller’s agent to approach financiers on the buyer’s behalf.
The rationale behind this is that any purchaser having second thoughts about buying a property could simply fail to take the necessary steps.
This would allow the period for the fulfillment of the suspensive condition to expire and thus for the offer to purchase to lapse.
In the interim, the seller has potentially missed out on keen and qualified purchasers.
From a legal standpoint, when the period for fulfilling a suspensive condition expires, the offer lapses.
It is possible to extend that period by agreement or, as may have happened in this instance, it could be extended by the seller to allow the agent to make applications on behalf of the purchaser.
The reader asks whether he is obliged to make a bond application in the extended time or whether he can merely wait it out.
The wording of the clause concerned is unlikely to permit such an approach considering that the agent is already involving a bond originator on his behalf.
The reader should also look closely at the offer he signed as there is possibly a clause dealing with damages as a result of the purchaser not even attempting to fulfill a suspensive condition.
A further problem is raised by the fact that the purchaser did not understand the extent of the contract he signed.
If the failure to understand related to the material terms of the offer, it is possible that the whole deal could be void or voidable due to the lack of consensus but it would be useful for him to approach an attorney for specific assistance.
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