Dave has lived in his property in Cherrybrook for 20+ years. He loves where he lives and has no intention of moving. However, he recently found out that the street he is living in is being considered for high density development.


A developer approached him asking if he will sell his property for $1.5 million but wants him to sign a contract saying that the developer has the option to purchase the property for 18 months, as the developer is only interested in the property if the council approves the subdivision plans.

Dave doesn’t understand the contract, but thinks it looks alright, and decides to sign it, because he doesn’t think the subdivision will go ahead. However, the subdivision is approved, and the developer has now approached Dave expecting him to sell his property for $1.5 million.

Dave is very distressed, because his neighbour only recently sold his house for $2.3 million, and it was a much smaller property than Dave’s, and he wants to know whether he can withdraw from the contract. 

Important Tips

1. Before entering a contract that you don’t understand, it is important to seek legal advice

2. The law provides that if you sign a contract you are bound by its terms, regardless of whether you understand the terms that the contract contains.

Q and A

Q: Are you bound by a contract, even if you think that the terms are unfair?

A: In some cases the court may hold that the terms of the contract are unfair, in which cse the contract will be regarded as if it was never entered into at the outset. However, a person not understanding the contract is not sufficient grounds for the court to consider that it is unfair. As an example if you spoke only a foreign language and the solicitors for the developer convinced you to sign the contract without legal advice or an interpreter, you may have a good chance to succeed.

Q: If you find out that your neighbour gets a better price for their property than what you received, does that mean that you don’t have to complete the contract?

A: No, once a property settlement occurs and the settlement is registered, you cannot ask for more money, even if you are sure that your property is worth more. However if the developer knew the true value and went to great lengths to keep this from you, you would have an argument for the contract t be cancelled.

How can E Berman & Co Solicitors help me?

E Berman & Co Solicitors is a Chatswood law firm that has been providing quality legal services to the public since 1984. Contact our office on 9412 2493 – we’re more than happy to have a quick chat! You can also visit us on our website for more information.

The information, including statements, opinions, documents and materials contained in this Chapter is intended for general information only. The Information does not take account of any specific needs you may have, or your specific circumstances, and it is not intended to convey legal advice. If you rely on or use any information provided in the Newsletter you do so at your own risk. If you intend to rely on the information as legal advice you should contact us first, or seek your own legal advice before relying on it. 
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