Dempster v Coates

In *Dempster v Coates* [1988] NSWCA 36, the New South Wales Court of Appeal considered a dispute between a vendor and a purchaser concerning a contract for the sale of land. The purchaser sought to terminate the contract, alleging that the vendor had failed to comply with a condition precedent.

The central legal issue before the Court of Appeal was whether the vendor had validly exercised its right to terminate the contract. This required the Court to determine the proper construction of a specific clause within the contract, which stipulated a condition precedent that needed to be satisfied before the contract became unconditional. The Court also had to consider whether the vendor's actions constituted a waiver of that condition or an election to proceed with the contract despite the alleged non-compliance.

The Court of Appeal held that the vendor had not validly exercised its right to terminate. It reasoned that the condition precedent had not been satisfied by the vendor within the time stipulated by the contract. Furthermore, the Court found that the vendor's conduct, particularly its subsequent actions in seeking to enforce the contract, amounted to a waiver of its right to rely on the non-fulfilment of the condition as a ground for termination. The legal principle applied was that a party cannot both affirm a contract and subsequently seek to terminate it based on a breach or non-fulfilment of a condition that they have implicitly waived.

The Court of Appeal accordingly dismissed the vendor's appeal and affirmed the decision of the primary judge, which had found in favour of the purchaser.