Reference
What a contract review actually finds
Worked examples from real contracts: the clause that moved $50,000, the deposit released before settlement, the easement the title did not mention.
13 min read
It is easy to say that contracts contain traps. It is more useful to show them. Every example below is drawn from a real contract of sale, and each one was found in an annexure rather than in anything anybody said out loud.
Case one: the deposit that did not add up
What the front page said. Price $1,310,000. Deposit $81,000. Balance $1,179,000.
The problem. Those last two figures total $1,260,000, which is $50,000 short of the price. The balance was exactly ninety per cent of the price, so it had been calculated from a $131,000 deposit that was never written on the page.
Why it mattered. The standard purchaser default clause lets the vendor "keep or recover the deposit (to a maximum of 10% of the price)". On a default the buyer forfeits the $81,000 actually paid and the vendor can pursue the remaining $50,000. There was no special condition anywhere authorising a reduced deposit.
Case two: three deleted words
What the annexure said. "Clause 8.1 is amended by deleting the words ‘on reasonable grounds’." And immediately after it, clause 8.2 amended by deleting "and those grounds".
The problem. The standard clause lets a vendor rescind only where they are, on reasonable grounds, unable to comply with a requisition - and the notice must state those grounds. Both requirements were removed. A further amendment extended the clause from requisitions to claims as well.
Why it mattered. The buyer's commitment stayed absolute while the vendor acquired the right to walk away in response to any question, for any reason, without explanation. Two short deletions, buried in a list of eleven lettered amendments.
Case three: the deposit spent before settlement
What the annexure said. The purchasers "irrevocably authorise the vendor's agent to release to the vendors such part of the deposit moneys as the vendors shall require" - to use as a deposit or stamp duty on the vendor's own next purchase.
The problem. No cap. No security. No requirement that the vendor be ready, willing and able to complete.
Why it mattered. If the sale collapsed through the vendor's default, recovering $81,000 would be an unsecured chase against an individual who had already spent it on another property. The printed warning on page two of the standard contract flags exactly this consequence, and it is routinely read past.
Case four: the easement the title did not mention
What the documents said. The deposited plan showed a drainage easement five feet wide. The Sydney Water service diagram drew it along the boundary of the property itself. The title search's second schedule recorded one notification only - a Crown minerals reservation - and no easement at all.
Why it mattered. An easement governs where you can build for the life of the property. A discrepancy between the plan and the register is not necessarily a defect, but it is a requisition, and the item in the list of documents for easement-creating instruments was not even ticked.
Case five: the contract dated before its own searches
What the front page said. Contract date: 14 March. The title search attached was dated 14 May. The council certificate 15 May.
Why it mattered. Completion was defined as the 42nd day after the date of the contract, which put settlement on a date two months in the past. On its face the buyer was in default from signature, exposed to penalty interest at 10% a year on the unpaid balance plus fixed fees, and the requisition window had already closed.
Case six: as-is, with nothing to inspect it against
Three conditions in the same annexure, each defensible alone:
- The property taken with all defects, patent and latent, with no right to object, requisition, claim or delay
- No claim permitted on anything a survey would show - and the vendor disclosing that the original survey would not be produced at settlement
- The contract not conditional on a building certificate, and the buyer unable to require the vendor to obtain one
Together with the standard clause obliging the purchaser to comply with any work order made after the contract date, the effect is that unapproved work and any resulting council order become the buyer's problem entirely, with no mechanism to discover them first.
What the buyer did with them
Findings are only worth something before exchange. In practice they become three things:
- Amendments requested - deletion of the rescission right, restoration of the claims threshold, a cap on the deposit release
- Requisitions to the vendor's solicitor - does the easement burden this lot, and why is it not on the folio
- Price - anything with a number the documents support, put to the agent as arithmetic rather than as an opinion
How these were actually found
None of this required privileged access. Every finding came out of documents the buyer was handed before signing. The obstacle was that the pack ran to 35 pages of contract, annexure, title, plan, planning certificate and drainage diagrams, and arrived days before an auction.
TrueBuy reads the whole pack and returns each finding with the exact quote and the page it came from. A point you can show is a point the agent has to answer.
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Common questions
Are these findings unusual?
No, and that is the point. Every example below comes from an ordinary contract on an ordinary property. The clauses are standard drafting used by vendors' solicitors every week. What is unusual is a buyer reading far enough into the annexure to find them.
Would a conveyancer find these too?
A good one, yes - that is their job and you should always use one. What changes is the order of events. Buyers who arrive with the findings already listed get a faster, cheaper and sharper piece of advice, and they arrive before exchange rather than after.
How do you put a dollar figure on a clause?
Only where the contract supplies its own arithmetic. A deposit that does not reconcile has a gap you can subtract. A compensation threshold cut from 5% to 1% has a difference you can calculate. Where the documents do not support a number, we do not invent one - an unevidenced figure is worse than none, because the agent will ask where it came from.
Where these figures come from
Grants, thresholds and duty rates change. Always check the current rules with the relevant state revenue office or Housing Australia before you rely on a number here.
Findings described here are from real contracts, summarised for illustration. Information, not legal advice. Confirm with your conveyancer before acting.