This article is concerned with the situation where there is a conflict between the standard conditions of a contract (i.e. the Terms of Contract on pages 7 – 15 of the REIQ contract) and the special conditions of a contract.
This was prompted by a contract that we saw this month where the building and pest provisions of an REIQ contract had been completed on page 3 of the REIQ contract giving the buyer 14 days to obtain a building and pest report and yet the special conditions stated that:
- The property was sold on an “as is where is” basis, and
- Clause 4 of the Terms of Contract did not apply (this clause setting out the building and pest condition terms).
The question for determination was whether or not the contract was subject to a building and pest condition.
On the face of it, the clauses of the contract set out above were contradictory. Therefore, it was necessary to dig deeper into the contract. Clause 10.9(4) of the Terms of Contract states:
If there is any inconsistency between any provision added to this contract and the printed provisions, the added provisions prevail.
However, this clause is not entirely helpful. “Any provisions added to the contract” could refer to the inserting of details in the Reference Schedule and/or any special conditions that are added.
A better special condition would be:
Where there is a conflict between the Terms of Contract (including the Reference Schedule)and the Special Conditions then the Special Conditions prevail.
In the above contract example, the parties ended up agreeing that the contract was subject to a building and pest condition. However, it could have ended up in a dispute. Therefore, it is important to ensure that the standard conditions do not contradict the special conditions.
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This update is for your information and interest only. It is not intended to be comprehensive, and it does not constitute and must not be relied on as legal advice. You must seek specific advice tailored to your circumstances.