Iannello v Sharpe

The dispute in *Iannello v Sharpe* concerned the validity of a contract for the sale of land, arising between the vendors, Iannello, and the purchaser, Sharpe. The primary judge had found in favour of the vendors. The appeal was heard in the Court of Appeal of New South Wales.

The Court of Appeal was required to determine two principal legal issues. First, whether alterations made by the purchaser's solicitor to a counterpart of the contract, without the purchaser's express authority, rendered the contract void. Second, whether a provision stipulating that part of the deposit would be forfeited in the event of default constituted an unenforceable penalty.

The Court of Appeal held that the alterations made by the purchaser's solicitor were not material and did not vitiate the contract. The court reasoned that the solicitor had implied authority to make such minor amendments as were usual in conveyancing practice. Regarding the deposit provision, the court found that it was not a penalty, as it represented a genuine pre-estimate of loss. Consequently, the appeal was allowed, the primary judge's orders were set aside, and judgment was entered for the purchaser on the vendors' claim and for the vendors on the purchaser's cross-claim. The orders concerning costs were also varied.