It is interesting, but perhaps not surprising on reflection, to see how the development of the law is driven by the economic climate and industry developments. Recently the Supreme Court of Western Australia has had cause to interpret the finance provisions in the standard form REIWA contract for the sale of land. It appears to me that these cases have arisen because of the effect that the GFC has had on both the property market and, perhaps more particularly, financial markets. That is; finance is harder to obtain (or at least obtain on terms suitable to a buyer) and buyers may, on reflection after signing a contract of sale, either suffer a change in circumstances or from 'buyer's regret', prompting them to not pursue finance for the transaction in as vigorous a manner as possible or from the financier they originally anticipated approaching, and nominated in the contract. Litigation then ensues and the Court has had reason to scrutinise the relevant clauses. The outcome of their scrutiny is, I believe, a more stringent interpretation of the operation of subject to finance clauses than most of us would probably have expected. This gives new meaning to the phrase 'buyer beware'.
This reminded me of the impact that the property boom in WA had, again in respect of contracts for the sale of land. There was a significant growth in enquiries we received and in cases going before the Court relating to contracts to buy homes 'off the plan'. It is not unusual for such contracts to have added to them by agents a special condition, usually intended to protect the buyer, requiring the building to be completed within a particular period of time. However, if the special condition was not drafted so as to make it clear that it was for the benefit of the buyer only, the effect of the law is that it is interpreted to have been inserted for the benefit of both parties. Builders were therefore deliberately delaying completion in order to then terminate the contract and put the property back on the market, sometimes at a price several tens of thousands of dollars higher then the initial contract price. As you might expect, these cases are now few and far between - how times change!