Question
Arthur agrees to buy a house from Martha for $750,000.Arthur and Martha want to save money and neither of them employs a solicitor. Instead, Martha
Arthur agrees to buy a house from Martha for $750,000.Arthur and Martha want to save money and neither of them employs a solicitor. Instead, Martha buys a standard form Sale of Land contract from her local legal stationer and fills in the blanks on the front of the contract. Both parties sign the contract and Arthur pays the 10% deposit.
The house is located in a very bushy area of Sydney and Arthur asks Martha, prior to signing the contract, whether the property is affected by termites. Martha says 'Don't worry, there are no termites in the property'. He proceeds to sign the contract.
About a week after Arthur signs the contract, he remembers about the termites and sends Martha a letter reminding her that this should be included in the contract.Martha does not answer the letter. Arthur has a pest inspection of the house done and the report comes back stating that the house is riddled with termites. It will cost at least $50,000 to fix the problem.
- How could Arthur enforce Martha's promise? [20 marks] (Refer to general law principles only)
- Would it make any difference if one of the standard clauses in the contract states: 'This contract represents the entire agreement between the parties and no other terms and conditions are enforceable outside of this contract'? [5 marks]
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