The inclusion of special conditions in a sale and purchase agreement, the satisfaction of which has the effect of triggering an unconditional agreement, ought to be approached with caution before signing any document.
In Love v Auburn Apartments Ltd (CA22/2/2012), Love challenged whether the High Court correctly interpreted special condition 39, which stated that the agreement was conditional on the apartment being built “as per the attached layout and plan”. Love cancelled the agreement on the basis that the deck area and internal structure pillars were not built according to the agreed plans.
The Court of Appeal disagreed with the High Court’s finding that the scope of special condition 39 ought to be limited by and to the specific issue of the reinstatement of the joinery. On the face of it, the first sentence did not look like a bold title heading, thus making it distinguishable from all other special conditions. This allowed the court to read it so as to prove that Love validly cancelled the agreement. The court also noted that the special condition was inserted by Love and consequently was intended to be applied generally throughout the agreement, rather than specifically.
Vendors and purchasers ought to exercise caution to ensure that they are aware of the implications of special conditions and how they operate in relation to the agreement as a whole. Where a special condition is distinguishable from the rest, its operation and effect should be clarified between both parties before signing any agreement.