Hun is the registered proprietor of a double-storeybungalow house which comes with a swimming pool and gazebo at 503/39 Grenfell Street, Adelaide. Hun wanted to sell his house and advertised it for sale for $5,000,000.00. Several months went by and no one seemed interested in buying Hun's house. Then, one (1) day Lara Hanna (Lara) who lives in Queensland comes across Hun's advertisement and asks to view the house. After seeing the house on 31 December 2020, Lara immediately liked the house and agreed to buy it. Not wanting to waste time, Hun issued a letter to Lara on the same day, that is, 31 December 2020, which contained the following salient terms:

Property 503/39 Grenfell Street, Adelaide

Purchase Price: $ 5,000,000.00.

Earnest Deposit Five percent (5%) of Purchase Price ($ 250,000.00) upon signing of this Booking Proforma

A further payment of five percent (5%) of the Purchase Price ($ 250,000.00)upon execution of the Sale and Purchase Agreement (SPA)

Balance Purchase Price of $ 4,500,000.00 to be paid within three (3) months from the date of the SPA

Time is of the essence

This offer is subject to the preparation of a formal SPA which is to be executed within two (2) weeks from the date of this letter.

Lara signed the letter on 31 December 2020 and paid Hun $250,000.00 cash. She then informed Hun that she will be applying for a loan to pay for the Balance Purchase Price. Despite applying to several banks, Lara was not able to get a loan and the SPA that was prepared by Lana's solicitor was still not executed on 14 January 2021.However, Lana was still interested in buying the house and paid Hun another $250,000, 00 on 14 January 2021. Lara told Hun that the SPA has not been finalized yet because she wanted to add a clause that Hun should have the house painted as it need a coat of paint but Hun rejected this by saying, "this is not part of the deal". Hun accepted the additional $250,000.00 paid by Lara but did not say or doanything about the extension requested by Lara. However, on 17 January 2021 Hun warned Lara that he will terminate the sale if the SPA was not signed by Lara by 21 January 2021. Lara was not able to get a loan and on 21 January 2021 the SPA was still not signed by Lara though it was already signed by Hun. Lara informed Hun that she no longer wanted to buy the house and demanded that Hun refund her $500,000.00. She also told Hun there was no agreement and if Hun did not refund the $500,000.00 she paid him as refundable deposit, she would sue him. Lara then directed her solicitor to send Hun a letter of demand for the refund of the $500,000, 00. Hun was confused. He would like to still proceed with the sale of his house to Lara; however, at the same time he wonders whether he has the right to forfeit the $500,000, 00 paid by Lara and terminate the sale.Advice Hun.Would your answer be different if Lara claimed that she agreed with the purchase and paid the said purchase price because she was convinced by Hun that the market value of the house is almost $700,000,000/-whichshe later found to be not true. The actual market value of the house is in fact much lower than the purchase price due to the operation of a chemical factory nearby.