Interview For EAC With Lisa Jemmeson | Restraints Of Trade

A business owner has the right to protect their legitimate business interests through the provision and enforcement of restraints of trade. However this happens very differently in the context of an employee, including commissions-only sales people, as to an independent contractor, which functions as a separate businesses operating in parallel to an agency.

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Bidding at the Auction

When property is being purchased by a Self-Managed Super Fund or a Trustee company, as these are not legal entities, contracts must be signed by an individual as trustee, or the director of a corporate trustee, in their capacity as such, on the trust’s behalf. It is necessary then to have documentation authorising the trustee, or director on behalf of the corporate trustee, to bid at auction.

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Exchanging Contracts

Agents are authorised under the Property, Stock and Business Agents Act 2002 to participate in the exchange of contracts for the sale and purchase of land. This authority is not absolute and is limited and excluded in certain circumstances. Agents need to be aware of their rights and where the limitations lie in order to avoid the risk of any potential litigation. An example of a particular situation where issues may arise is where a party is represented by a solicitor or conveyancer. 

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Rescission of Contract on Auction Day

The perfect scenario for a Vendor on Auction day would be for them to sell a property to the highest bidder on terms agreeable to both parties, however, purchasers are often quite unprepared for the Auction process. Some will not have a deposit ready on the day, or will request further amendments to the contract. As a consequence auctioneers have been given an unfettered discretion to act in the interests of the Vendor to conclude the sale.

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Checking Contracts For Sale

When receiving contracts of sale for marketing purposes, agents have a duty to check that the contracts they have received are complete documents and they must not market the property until a complete contract is received. Legislation requires specific documents to be annexed to the contract of sale otherwise the purchaser will have the option to withdraw from the contract within 14 days of exchange.

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Exchanging With A Deposit Bond

It is a common occurrence for purchasers to seek to provide a deposit bond in place of a cash deposit on the exchange of a contract for sale of land. When dealing with these situations there are a few pitfalls for agents to avoid. An example would be attending to exchange of the contracts with a deposit bond without the prior approval and authority from the Vendor.

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Exchanging Contracts Without The Full Deposit

In the current property market, it is not always possible for purchasers to have the full 10% deposit required to be paid on the exchange of contracts. In these circumstances a part deposit can be agreed upon, however, Agents need to be careful that they do not go beyond the scope of the authority given to them in making these changes in the contract. In doing so they may place themselves in a position where they may be made liable.

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