Contract of Sale

Plain-English definition. The contract of sale is the binding legal document signed by buyer and seller that sets out the agreed price, settlement date, deposit, inclusions and any special conditions for a property purchase.

How it works in Australia. Each state has its own form and disclosure regime: Victoria requires a Section 32 vendor statement; NSW requires a Contract for the Sale of Land bundled with prescribed documents; Queensland uses the REIQ standard contract; SA requires a Form 1; WA uses the Joint Form of General Conditions. The contract becomes binding on "exchange" (NSW/VIC) or "signing" (QLD/WA). Standard conditions you can negotiate include finance approval, building-and-pest, and subject-to-sale. Failure to settle on the agreed date typically triggers default interest at the contract rate (often 12–15% p.a.) plus a notice to complete.

Concrete example. A $950,000 Sydney house sells with a $95,000 (10%) deposit, 42-day settlement, and conditions: finance approval within 14 days, satisfactory building inspection within 10 business days. The buyer's lender declines the loan on day 13. The buyer issues notice under the finance condition and the contract is rescinded; the deposit is returned in full. Without that condition (e.g. an auction purchase), the buyer would forfeit the entire $95,000 deposit.

Common confusion. Buyers think they can walk away once the contract is signed because of the cooling-off period — but cooling-off periods don't apply to auction purchases or to private treaty sales in some states without specific notice. Once unconditional, the buyer is committed to settle or lose the deposit.