Are you a property buyer looking to purchase property in Queensland? Understanding contractual terms and conditions is essential to prevent disputes and potential financial losses. Our expert property lawyers at HTW Legal Group are well-equipped to provide legal advice to help navigating your property purchase journey.
Overview of Evans v Jan [2025] QSC 31
In a recent Supreme Court of Queensland case, Evans, a home buyer, entered a contract for the sale of a residential property (“Sales Contract”) with Jan, the homeowner, for a property in Shailer Park, QLD for $985,000.
Evans had to pay a $98,500 (10% of the purchase price) as deposit upon signing, an essential term of the Sales Contract.
Due to banking restrictions on his daily transfer limit, Evans informed the Sales Agent that he was unable to complete the deposit transfer on the same day. The next day, the Sales Agent texted Evans reminding him to make the deposit payment.
Evans relied on the Sales Agents’ text messages to make four transfer, one and two days after the Sales Contract signing date, totalling $98,500.
Essentially, Evans failed to pay the full deposit on time, on the Sales Contract signing date. Even though Jan received the full $98,500 deposit, she terminated the Sales Contract in view of the deposit not having been paid in accordance with an essential term of the Sales Contract (being the payment of the deposit within a specified period) and sought forfeiture of the whole $98,500 deposit, including interest, as per the Sales Contract terms.
The Court’s Ruling in Evans v Jan
The Queensland Supreme Court ruled to dismiss Evans’ claim to enforce the sales of the property. The Court also ordered that the entire $98,500 deposit Evans had paid, including interest, be forfeited to Jan.
Key Legal Findings
- Actual Authority: Actual authority refers to the power granted to an agent by a principal to act on the principal’s behalf in specific circumstances. This authority is explicitly given and can either be expressed or implied. The Sales Agent lacked actual authority to alter the deposit payment terms as the Sales Contract provides that the Sales Agent role is for the introduction of a buyer and not for any modification to the contractual obligations.
- Ostensible Authority: Also known as apparent authority, refers to a situation in which a principal gives a third party the impression that an agent has the authority to act on their behalf, even if the agent does not actually have such authority. For affirmation to occur, Jan must have unequivocally given consent for the Sales Agent to act on her behalf.
- Contract Affirmation: Making unilateral payments late without affirmation (from both parties) does not mean that the Sales Contract is still valid.
- Estoppel Argument: Without actual, or ostensible, authority, the Sales Agent’s word cannot be deemed to have binding effects on the buyer of the property.
Key Takeaways
Capacity & Clear Authority: The law accepts that the while the Sales Agent remained the real estate agent to sell the property, those circumstances did not confer actual authority for the Sales Agent to agree to arrangements for the payment of the deposit that did not accord with those provided for in the Sales Contract.
Mutual Offer and Acceptance: The offer and acceptance must be mutual and unambiguous. Any ambiguities in the contract terms or disagreements over changes to the Sales Contract could affect its’ validity.
If there is any conflict between the representation of the Sales Agent and the Sales Contract, that should be confirmed in writing with the solicitor.
Sales Contract Deposits: A deposit, once paid, does not lose its nature even if paid late. If the Sales Contract is terminated due to a breach, sellers can often retain the deposit, or pursue a claim if unpaid, under the forfeiture clause.
What Should You Do If You Cannot Meet the Terms of Your Property Sales Contract in Queensland?
At HTW Legal Group, we understand the complexities of property law and the importance of clear communications for property transactions. Our experienced conveyancing team specialises in providing advice to ensure that your legal interests are protected.
📞 Contact HTW Legal Group today for a consultation and safeguard your property interests in Australia.
