Sale and Purchase of Property
(Real Estate)
Read whole topic Back Print Forward

1. If one party commits other wrongful acts, e.g. the vendor broke a small window in the kitchen, can the other party terminate the sale and purchase agreement or claim for compensation?

It all depends on whether the contract/agreement term being infringed is a "condition" (major term) or a "warranty" (minor term). For the breach of a condition, the injured party is entitled to terminate the agreement and claim compensation. For breach of warranty, the injured party is ONLY entitled to claim compensation. Whether a contractual term is a condition or a warranty should be considered using common sense and will depend on how serious the infringement is. If such a dispute is brought before the Court, then the judge will make the final decision.

This principle also applies to property transactions. If the vendor only broke a kitchen window (which can be considered as a breach of warranty/minor term), the purchaser can only claim the repairing cost, or ask the vendor to replace the window before the handover date. There is little likelihood of the purchaser being entitled to terminate the sale and purchase agreement and ask for a refund of deposits.

Attention should also be drawn to any term like "time is of the essence of this agreement" or "time must be strictly adhered to in this agreement". This reminds the vendor and the purchaser that any late delivery of cheques or keys would constitute a breach of a condition/major term and entitle the other party to back out from the sale and purchase.

Top