Most people in the property industry will appreciate that the contract often refered to as the contract of sale, is the document in which a seller and a buyer agree to sell and buy a property.

The contract contains:

• Details of the parties.
• Purchase price.
• Settlement date.
• Conditions (both standard conditions and special conditions) for the transaction.

If there is a dispute then the parties will look to the contract to see what was agreed, what the respective parties’ position is and what remedies are available.

However, there are situations where representations made by the seller or the seller’s agent may be relevant to the contractual position between the seller and the buyer.

If those representations are incorrect or misleading then it is likely that they are misrepresentations.

Examples of misrepresentations in a contract of sale

• Agents sales brochures being inaccurate
• Online advertising such as realestate.com.au being inaccurate
• A buyer being told something about the property by the seller which is inaccurate
• A buyer being told something about the property by the agent which is inaccurate

If there has been misrepresentation then the seller and the agent may be liable.

Misrepresentation can lead to the contract being terminated and/or a claim for damages.

As a result, care must be taken with what is printed about the property and what is said about the property.

One final note of caution is that if a seller or the agent knows that there is a defect with the property and fails to disclose it then silence can be a form of misrepresentation.

As mentioned in “Caveat Emptor: Does it still apply to property transactions?” a previous article, the days of caveat emptor (let the buyer be aware) are all but gone.

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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. This article was originally published on the 30-09-2020. It was updated on the 10-06-2022.