Implications of "in good faith"

[TheSaint]

This agreement is conditional on the Purchase being satisfied with a report on the property to be obtained from a builder or other qualified specialist. Should the Purchaser in good faith be dissatisfied with any matter contained in the report the Purchaser may terminate this agreement by notice in writing to the Vendor or the Vendor's solicitor such notice to be received by 4.00pm on ........................



Would this condition really allow the buyer to cancel the purchase if dissatisfied with any matter in the report?

[drelly]

I think that "in good faith" would put some limitations on being able to cancel but suspect that it would be up to lawyers to "duke it out" to determine where that line is.

[TheSaint]

Thanks. Lucky I check with you guys. Agent tried to get me to use this. It does give the impression that one can cancel if dissatisfied with any matter.

[drelly]

I'd prefer something that says I can cancel for any reason. Let them have a clause that says they can accept other offers and give you a fixed period to go unconditional or terminate the contract. The buyer is in charge at the moment!

[Xav]

There is a reason that the clauses recommended on these forums and elsewhere use in "the purchaser's sole discretion" (or similiar) rather than "good faith". I find the vendors' agents often try to put this kind of wording in but it would be a good idea to change it if at all possible.

[Winston001]

There is a reason that the clauses recommended on these forums and elsewhere use in "the purchaser's sole discretion" (or similiar) rather than "good faith". I find the vendors' agents often try to put this kind of wording in but it would be a good idea to change it if at all possible.

+2. Agreed. Haven't seen "in good faith" for years - too woolly and open to challenge.

[graemeh]

Get the wording from your lawyer. You should also get the agreement checked by you lawyer before you sign it.

Don't accept the agents word when they tell you that adding a clause saying "subject to lawyers approval" means you don't need the lawyer to check it first.

[SwissKiwi]

I use this:

Should the purchaser be dissatisfied with any aspect of the property the purchaser may terminate this agreement by notice in writing to the vendor or the vendor’s solicitor at any time on or before the expiry of the Due Diligence Period. This clause is inserted for the sole benefit of the purchaser and where it is not satisfied the purchaser shall not be required to state the reason.



I wouldnt want to rely on anyones 'good faith' in any business deal.

[TheSaint]

Would removing the "in good faith" like below be good enough?

This agreement is conditional on the Purchase being satisfied with a report on the property to be obtained from a builder or other qualified specialist. Should the Purchaser be dissatisfied with any matter contained in the report the Purchaser may terminate this agreement by notice in writing to the Vendor or the Vendor's solicitor such notice to be received by 4.00pm on.......


Today one agent told me that if I put in a LIM condition, he will have to put in an escape clause that would allow the vendor to accept other unconditional offers, giving me 5 days to go unconditional. According to him, a LIM condition would tie down the vendor for too long.

[graemeh]

Look, if you want legal advice ask your lawyer. Most don't charge for looking at the S&P agreement if you do conveyancing through them (but obviously check this).

As for the "escape clause" for the vendor, what do you think the chances of them getting an unconditional offer actually are?

Just put your offer in writing with any clauses you want, give it to the agent and see where it goes.