11420 – Contracts

This entry covers the real estate contract itself — the elements that make it legally valid, the standard contract for sale of land, and the exchange process — as the document underlying both the closing process described in Closing (11130) and the leasing process described in Leasing (11220). It sets out the contract fundamentals directly, rather than repeating them piecemeal inside each entry that touches a contract.

The practical value of understanding these fundamentals directly, rather than only through their application in individual transactions, is that it gives an agent a stable reference point for the questions that recur across every deal — what makes a contract binding, what a special condition can and can’t override, and when the legally significant moment of exchange actually occurs.

This entry covers:

• The essential elements of a valid contract
• The standard contract for sale of land, and how special conditions relate to it
• Exchange of contracts as a specific, legally significant event

This entry does not cover:

• The contract-to-settlement process and conditions once a contract exists → addressed in Closing (11130)
• The residential lease as a distinct contract type → addressed in Leasing (11220)
• The fiduciary relationship this contract sits within → addressed in Agency Law (11410)

Contract law in Australia is a mix of general common law contract-formation principles, applicable nationally, and state-based legislation prescribing the specific form of a residential contract for sale, mandatory disclosure documents, and cooling-off rights — meaning the essential elements described above are consistent everywhere, but the actual document and its required attachments differ meaningfully by state.^1,2,3

Vendor disclosure obligations — specific facts or documents a vendor must attach to or disclose before a contract is signed — are a further state-specific layer, and a failure to comply can in some states give a buyer grounds to rescind the contract even after exchange.^1,2,3

Knowing the Line Between Explaining and Advising

Agents facilitate the contract process — coordinating exchange, explaining the standard structure and timeline — but aren’t licensed to give legal advice on contract terms; knowing the boundary between explaining the standard process (fine) and advising on a specific legal question a client raises (not fine, refer to a solicitor or licensed conveyancer) protects both the client and the agent.

Confirming Disclosure Requirements Before Every Contract

Because vendor disclosure requirements can affect whether a contract is even valid, confirming what’s required for the specific state and property type before a contract goes to a buyer is worth treating as a standing checklist item, not an assumption carried over from the last transaction.

Common Mistakes

The most common mistake is an agent straying into legal advice when a client asks a direct question about a contract term, rather than referring them to a solicitor or conveyancer. A second is drafting or accepting an ambiguously worded subject-to clause that leaves both parties unclear on what actually satisfies the condition. The third is assuming a vendor disclosure requirement from a previous state or transaction applies unchanged to a current one.

1. Conveyancing Act 1919 (NSW) — NSW Legislation
2. Sale of Land Act 1962 (Vic) — Victorian Legislation
3. Property Law Act 2023 (Qld) — Queensland Legislation