A contract of sale includes a finance clause with a 21-day approval period. On day 20, the purchaser's bank requests additional documentation that will delay approval by one week. What should the purchaser do to protect their interests?
Correct Answer
D) Ask the vendor for a written extension before the finance date passes
Finance clauses have strict deadlines, and failure to obtain approval or waive the condition by the specified date typically results in contract termination. The purchaser must negotiate a written extension with the vendor before the deadline expires to maintain their legal position.
Why This Is the Correct Answer
A finance date is a contractual deadline that only both parties can change. Asking the vendor for a written extension before the date passes keeps the buyer's protection alive while the bank finishes its assessment. What happens if the date passes without action depends on the wording of the finance clause, which is why acting before the deadline matters.
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A property contract in NSW contains a clause requiring the purchaser to obtain finance approval within 21 days, failing which the contract becomes null and void. The purchaser's bank approves the loan on day 22, but the purchaser wants to proceed. What is the legal position?