Hello,
I am currently negotiating a commercial deal and have been waiting for a counteroffer for some time. Finally I have some Vendor conditions to be added and a couple of them have me a bit baffled.
The first one is that they have put in a cash-out clause (no surprise) but they have no time frame. When the Vendor's solicitor was questioned about this, the reply was:
"
I acknowledge your email of yesterday and have given consideration to your comment regarding the provision of a timeframe within which the Purchaser could confirm the Agreement as unconditional. Having regard to the format of this particular contract (especially the additional Vendor's conditions which need to be included) I consider that such a procedure would not be workable. I agree that a provision of the nature suggested by you is common for "cash-out" clauses, but these normally relate to contracts where there is no vendor finance and no other vendor conditions which could be outstanding at the time. Accordingly, if such a provision were incorporated in the proposed clause in this particular case then at the most it would entitle the Purchaser to confirm the due diligence clause but that could well leave outstanding various Vendor conditions which would still need to be satisfied. In the circumstances, I consider that the proposed Clause 23.1 needs to> remain in the form provided."
Now I don't know of many investors who would want to fork out thousands in their due diligence so that the rug gets pulled out under their feet at the last minute.
Secondly, an added comment was:"AND if any of the forgoing conditions shall not be satisfied within 5 working days of this agreement becoming unconditional in all other respects the vendor shall be entitled by writing to cancel the agreementin which case neither party will have claim for compensation"
Does that mean that if I go unconditional, pay my deposit, the Vendor decides that they are not happy with one of those conditions that they keep my deposit?ANy comments would be appreciated. My solicitor is working for the same firm as the Vendor's and I am not happy with the service or charges so I am in between solicitors at this time.THanx
I am currently negotiating a commercial deal and have been waiting for a counteroffer for some time. Finally I have some Vendor conditions to be added and a couple of them have me a bit baffled.
The first one is that they have put in a cash-out clause (no surprise) but they have no time frame. When the Vendor's solicitor was questioned about this, the reply was:
"
I acknowledge your email of yesterday and have given consideration to your comment regarding the provision of a timeframe within which the Purchaser could confirm the Agreement as unconditional. Having regard to the format of this particular contract (especially the additional Vendor's conditions which need to be included) I consider that such a procedure would not be workable. I agree that a provision of the nature suggested by you is common for "cash-out" clauses, but these normally relate to contracts where there is no vendor finance and no other vendor conditions which could be outstanding at the time. Accordingly, if such a provision were incorporated in the proposed clause in this particular case then at the most it would entitle the Purchaser to confirm the due diligence clause but that could well leave outstanding various Vendor conditions which would still need to be satisfied. In the circumstances, I consider that the proposed Clause 23.1 needs to> remain in the form provided."
Now I don't know of many investors who would want to fork out thousands in their due diligence so that the rug gets pulled out under their feet at the last minute.
Secondly, an added comment was:"AND if any of the forgoing conditions shall not be satisfied within 5 working days of this agreement becoming unconditional in all other respects the vendor shall be entitled by writing to cancel the agreementin which case neither party will have claim for compensation"
Does that mean that if I go unconditional, pay my deposit, the Vendor decides that they are not happy with one of those conditions that they keep my deposit?ANy comments would be appreciated. My solicitor is working for the same firm as the Vendor's and I am not happy with the service or charges so I am in between solicitors at this time.THanx
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