Escape clauses and back up clauses [Mar 2008]

Here is the wording we would recommend for an escape clause:

“If before this agreement becomes unconditional the Vendor obtains another written offer on terms and conditions which are acceptable to the Vendor, the Vendor may deliver to the Purchaser or Purchaser’s solicitor notice in writing requiring the Purchaser to confirm this agreement as being unconditional.  The Purchaser shall have until 4.00pm on the ____ working day after delivery of the Vendor’s notice to given written advice to the Vendor or the Vendor’s solicitor that this agreement is unconditional, otherwise this agreement shall terminate and the deposit paid (if any) will be returned to the Purchaser.”

Issues:

1.  The clause refers to any other offer not an unconditional offer.

2.  As usual notice must be in writing.

3.  Note the time for satisfaction of the condition is 4pm not 5pm.

4.  The number of working days needs to be completed.  Check if a weekend intervenes as it could effectively work out to be longer time frame eg: 5 days if clause refers to 3 working days.

For more information contact Tim Jones.

The contents of this newsletter are of a general nature only. While the information is believed to be correct no responsibility is accepted for its accuracy. Readers are advised to establish the applicability of information in relation to specific circumstances and not to rely solely on the text of this newsletter.

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