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“Another Purchaser” Backfires on Agent – By Barry van Heerden – Senior Associate

“There is another Purchaser.  You will have to make an unconditional higher or better offer.”

These were the words uttered by an Agent to a Purchaser who then signed a Contract of Purchase of Real Property based solely on the statements made by the Agent.

Personal guarantees were also provided for the performance of the Purchaser.

Due to some non disclosure issues, the Purchaser did not settle on the settlement date and the Vendor commenced proceedings in which it sought specific performance of the Contract.

During the proceedings the Purchaser took the point that it was basically “forced” to sign the Contract due to the statements made by the Agent. The Vendor admitted there was no other Purchaser nor was there any need for the Contract to be unconditional.

The Victorian Supreme Court held that the statement by the Agent was misleading, deceptive and false.  Subsequently the Contract entered into was void and all monies paid by the Purchaser were to be refunded to him with interest.

Even though this was a Victorian case, all Agents should be careful not to put pressure on Purchasers to enter into a Contract or to make a higher unconditional offer when there is no reason to do that. It may well be that a Vendor who suffers damages as result of a Contract being declared void because of untrue statements made by an Agent will have a claim against the Agent.


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Jeff Garrett

Jeff Garrett

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