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Contract Clause

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  • 03-03-2006 2:41pm
    #1
    jimmy2180
    Registered Users Posts: 34 ✭


    Hi - I was wondering if anybody could give me some advice?

    We are FTB's and went sale agreed on a house 6 weeks ago. We paid the booking deposit right away and went out of our way to get everything on our side done quickly as we were told the vendors wanted a quick sale. The contracts have been signed from our side with a closing date in place (8 weeks or so from now) which the vendors had agreed upon.

    Our solicitor contacted us today to say the vendors had signed the contracts but with an added clause that if the sale of their new house (which is being built) falls through, then they can pull out of this one. We are unhappy about this, as it means we can could be left in the lurch after waiting 14 weeks or so and doing everything we could to secure the sale quickly. Therefore I was hoping someone could answer the following questions for me:

    1) What is the point of them signing the contract if they can pull out at any time?
    2) Is this unusual? Has anyone else had this clause put in?
    3) We were thinking of seeing if we could put a clause in ourselves to say that they had to have the contracts signed by a set date and after that was done, the clause they put in would be void. Is this an option?

    The reason this is such a problem, is that our mortgage approval runs out a matter of days after the closing date in the contracts, and we will be unable to get a new approval for anywhere near the amount we need.

    Any advice would be much appreciated.


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    #2
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    jimmy2180 wrote:
    1) What is the point of them signing the contract if they can pull out at any time?

    They can't pull out 'at any time'. They can pull out if the sale of their house falls through.
    jimmy2180 wrote:
    2) Is this unusual? Has anyone else had this clause put in?

    Very common, though it probably should have been signalled before now and agreed with your Solicitor.
    jimmy2180 wrote:
    3) We were thinking of seeing if we could put a clause in ourselves to say that they had to have the contracts signed by a set date and after that was done, the clause they put in would be void. Is this an option?

    You can do anything you like before signing. I take it you have signed already though, and in that case you can make a song and dance about the or side bringing in a new term and seek to have that term put in.


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    #3
    jimmy2180
    Registered Users Posts: 34 ✭jimmy2180


    Deleted User wrote:
    They can't pull out 'at any time'. They can pull out if the sale of their house falls through.

    Well you know what I mean. We thought the house would be ours after they signed the contracts. We weren't even aware that it was possible to pull out after both parties had signed. As I said, we are FTB's and not at all experienced with this.
    Deleted User wrote:
    Very common, though it probably should have been signalled before now and agreed with your Solicitor.
    Deleted User wrote:
    You can do anything you like before signing. I take it you have signed already though, and in that case you can make a song and dance about the or side bringing in a new term and seek to have that term put in.

    Yes, we did sign already. The clause was added when they sent their signed contracts back to our solicitor.

    Anyway, thanks for the reply. Put our minds at rest a bit. The solicitor could have told us that this was common, but she must have decided it would be fun to make us sweat a bit :) This is stressful when you don't know what you're doing!


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    #4
    Victor
    Registered Users Posts: 78,392 ✭✭✭✭Victor


    Put a price on it.


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    #5
    rooferPete
    Registered Users Posts: 1,497 ✭✭✭rooferPete


    Hi,

    Victor may be right, my reading is you signed one contract and the vendor added a clause then signed.

    I could be wrong but as far as I know you can either reject the ammended contract or sign the new contract.

    As it stands the vendor has one contract signed by the purchaser and the purchaser has a different contract signed by the vendor, it doesn't look like an agreement to me.

    You could ask your Solicitor to send back the ammended contract with another ammendment stating that you will close the sale on the agreed date and if you don't have vacant possesion the vendor must pay rent at the rate of 1,000.00 per week.

    A penalty clause is what I would call it.


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    #6
    MorningStar
    Closed Accounts Posts: 3,031 ✭✭✭MorningStar


    This doesn't sound right. What have you actually signed and what have they signed?
    My understanding is nothing is certain untill the contracts are signed on the end date and either party can walk away at any point without penalty. You get the house when you sign. Anything else signed has no legal standing due to property laws, contracts having no meaning here even though it is a signed agreement.


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    #7
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    Its a common practise. Its not normal to add it in after you have signed an agreement- and as Victor states- add a penalty, put a price on it. You agreed to pay a certain price based on a certain set of conditions. Those conditions have now changed- you should suggest either putting a price on the clause, or a series of scaled penalties. Pick a price that you are willing to accept for the addition of this clause - maybe 5k or whatever and deduct it from what you were willing to pay for the house and get them to agree to that. The addition of their clause is a dimunition of what you originally signed up to. They of course do not have to accept your penalty- that would put you in the position of either negotiating with them or walking away.


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    #8
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    smccarrick wrote:
    Its a common practise. Its not normal to add it in after you have signed an agreement- and as Victor states- add a penalty, put a price on it. You agreed to pay a certain price based on a certain set of conditions. Those conditions have now changed- you should suggest either putting a price on the clause, or a series of scaled penalties. Pick a price that you are willing to accept for the addition of this clause - maybe 5k or whatever and deduct it from what you were willing to pay for the house and get them to agree to that. The addition of their clause is a dimunition of what you originally signed up to. They of course do not have to accept your penalty- that would put you in the position of either negotiating with them or walking away.

    If I was the other party, and I was not over a barrel (say with the bank or the other transaction), I would tell anyone who tried to renegotiate the price to take a hike and put it back on the market. What they did is permissible in Irish law, even if it did come as a shock to you, and I wouldn't expect to reduce my price because the law of conveyancing is the way it is and I availed of it...


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    #9
    Victor
    Registered Users Posts: 78,392 ✭✭✭✭Victor


    rooferPete wrote:
    A penalty clause is what I would call it.
    Only a judge can impose a penalty, however, you could include liquidated damages.

    Conor is right, they could tell you to shove it, but its your turn to tell them to shove it, but realise you might loose out.

    Demand performance by a certain date (and tell your solicitor you want this) or else.


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