A contract of sale is a legal and binding document containing the terms and conditions agreed upon between a seller and a buyer in relation to goods. These contracts can be written by a solicitor or real estate agent or with the help of a conveyancing lawyer. The essential elements that must be included in the contract of sale are:

  • Parties: There should be at least two parties, i.e. the seller and the buyer.
  • Subject matter: The subject matter of the contract must be stipulated.
  • Price: This includes the monetary consideration involved in the sale of goods and when it is owing.
  • Transfer of property: There should be a transfer of property in goods from the seller to the buyer.

All other essential components of a valid contract such as offer, acceptance and intention to create legal relations also form the essential elements of a contract of sale.

Components of a Contract of Sale Relating to Property

Property sale contracts have a list of requirements that must be upheld in order for your land sale contract to be viable. The essential components of a contract of sale concerning property sales include the following:

Details about the Vendor and the Purchaser: This includes the name and present residential addresses of the parties to the contract of sale.

The description or the physical dimension of the property to be sold.

A list of chattels included in the property: Chattels are items that are not physically attached to the property and these include amongst other things items like curtains, furniture, dishwasher, fridge, and the washing machine.

The purchase price or consideration of the property and the date of such payment(s): In case of sale of a property, consideration may usually be divided into deposit and the remaining balance. The percentage of the amount to be deposited depends on the terms of negotiation mutually agreed upon by both the parties.

General covenants: These include terms and conditions relating to loss or damage to the property prior to settlement, consequences for breach of contract, penalties for delay in settlement, transfer charges, whether the real estate sales contract is subjected to financial approvals or the sale is subjected to a tenancy, including whether the property is presently in the occupancy of a tenant etc.

Easement rights: An easement gives an individual or a company the right to use the land or property for a particular purpose. The inclusion of a clause relating to easement actually restricts the use of a property. Common easements include a shared driveway between neighbours or routing of electrical mains or drainage systems through a property by governmental authorities. Easements that are registered on a certificate of title will remain as the land is bought and sold. It can only be removed upon mutual agreement of the easement holder and the owner of the land.

Sunset Clause: This clause is a provision in a contract of sale that sets certain stipulation(s) after which the agreement will no longer be effective, such as reaching settlement by a certain date. The incorporation of this clause enables both the buyer and the seller to protect themselves from certain circumstances. For example, a buyer can use a clause to state the expected completion date of certain constructions and/or developments and cancel if such developments are not completed within the particular time period. Similarly a seller might use a sunset clause to fix a settlement date thereby ensuring that the payments are fully and promptly paid.

Cooling-off Period: The contract of sale often contains information about a ‘Cooling-off period’. This clause enables a buyer to end the contract without large penalties.

Goods & Services Tax (GST): Before signing a contract of sale it is always recommended that the purchaser should check whether GST is included in the purchase price or not.

Owen Hodge Lawyers can provide advisory and consulting services and assist in drafting of a contract of sale and other agreements of a similar nature. If you require legal guidance on this matter, contact the lawyers Sydney residents rely on at Owen Hodge on 1800 770 780.

If you are interested in buying or selling commercial property then speak to our commercial conveyancing lawyers today.

More information relating to property sales:

4 Step Process of Property Settlement

Buying a Home by Auction vs. Sale

Buying a Home or Residential Property

Can I change my mind after I have put a deposit on a home?

How To Ensure A Smooth Property Transaction

Searches Required to be Attached to the Contract of Sale

Settlement Process

A contract of sale is a legal and binding document containing the terms and conditions agreed upon between a seller and a buyer in relation to goods. These contracts can be written by a solicitor or real estate agent or with the help of a conveyancing lawyer. The essential elements that must be included in the contract of sale are:
  • Parties: There should be at least two parties, i.e. the seller and the buyer.
  • Subject matter: The subject matter of the contract must be stipulated.
  • Price: This includes the monetary consideration involved in the sale of goods and when it is owing.
  • Transfer of property: There should be a transfer of property in goods from the seller to the buyer.
All other essential components of a valid contract such as offer, acceptance and intention to create legal relations also form the essential elements of a contract of sale.

Components of a Contract of Sale Relating to Property

Property sale contracts have a list of requirements that must be upheld in order for your land sale contract to be viable. The essential components of a contract of sale concerning property sales include the following: Details about the Vendor and the Purchaser: This includes the name and present residential addresses of the parties to the contract of sale. The description or the physical dimension of the property to be sold. A list of chattels included in the property: Chattels are items that are not physically attached to the property and these include amongst other things items like curtains, furniture, dishwasher, fridge, and the washing machine. The purchase price or consideration of the property and the date of such payment(s): In case of sale of a property, consideration may usually be divided into deposit and the remaining balance. The percentage of the amount to be deposited depends on the terms of negotiation mutually agreed upon by both the parties. General covenants: These include terms and conditions relating to loss or damage to the property prior to settlement, consequences for breach of contract, penalties for delay in settlement, transfer charges, whether the real estate sales contract is subjected to financial approvals or the sale is subjected to a tenancy, including whether the property is presently in the occupancy of a tenant etc. Easement rights: An easement gives an individual or a company the right to use the land or property for a particular purpose. The inclusion of a clause relating to easement actually restricts the use of a property. Common easements include a shared driveway between neighbours or routing of electrical mains or drainage systems through a property by governmental authorities. Easements that are registered on a certificate of title will remain as the land is bought and sold. It can only be removed upon mutual agreement of the easement holder and the owner of the land. Sunset Clause: This clause is a provision in a contract of sale that sets certain stipulation(s) after which the agreement will no longer be effective, such as reaching settlement by a certain date. The incorporation of this clause enables both the buyer and the seller to protect themselves from certain circumstances. For example, a buyer can use a clause to state the expected completion date of certain constructions and/or developments and cancel if such developments are not completed within the particular time period. Similarly a seller might use a sunset clause to fix a settlement date thereby ensuring that the payments are fully and promptly paid. Cooling-off Period: The contract of sale often contains information about a ‘Cooling-off period’. This clause enables a buyer to end the contract without large penalties. Goods & Services Tax (GST): Before signing a contract of sale it is always recommended that the purchaser should check whether GST is included in the purchase price or not. Owen Hodge Lawyers can provide advisory and consulting services and assist in drafting of a contract of sale and other agreements of a similar nature. If you require legal guidance on this matter, contact the lawyers Sydney residents rely on at Owen Hodge on 1800 770 780. If you are interested in buying or selling commercial property then speak to our commercial conveyancing lawyers today. More information relating to property sales: 4 Step Process of Property Settlement Buying a Home by Auction vs. Sale Buying a Home or Residential Property Can I change my mind after I have put a deposit on a home? How To Ensure A Smooth Property Transaction Searches Required to be Attached to the Contract of Sale Settlement Process

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