Can A Vendor Pull Out Of A Conditional Contract in NZ?

If you`re buying a property in New Zealand, you`ll likely come across a conditional contract at some point. This means that the sale of the property is subject to certain conditions, such as the buyer obtaining finance or the property passing a building inspection. But what about the seller? Can they pull out of a conditional contract in NZ?

The answer is, it depends. There are a few scenarios in which a vendor may be able to withdraw from a conditional contract:

1. The conditions have not been met

If the conditions in the contract have not been met, the vendor may be able to back out of the sale. For example, if the buyer is unable to obtain finance within the specified time frame, the vendor may be able to cancel the contract.

2. The buyer is in breach of the contract

If the buyer has breached the terms of the contract, such as by failing to pay a deposit or failing to settle on the agreed date, the vendor may be able to cancel the contract.

3. The vendor has included a „cooling-off” clause

In New Zealand, vendors have the option to include a „cooling-off” period in the contract. This allows them to withdraw from the sale within a certain timeframe, regardless of whether the buyer has met the conditions of the contract.

That being said, it`s important to note that withdrawing from a contract can have legal and financial consequences. If the vendor is found to have breached the contract without valid cause, they may be liable for damages or may be forced to complete the sale.

It`s always a good idea for both buyers and vendors to seek legal advice before entering into a conditional contract. This can help ensure that the terms are fair and reasonable, and that both parties understand their rights and obligations.

In summary, a vendor may be able to pull out of a conditional contract in NZ under certain circumstances, such as if the conditions have not been met or if the buyer is in breach of the contract. However, withdrawing from a contract can have legal consequences and it`s important to seek legal advice before taking any action.